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Stock Code : 3986
(A joint stock company incorporated in the People’s Republic of China with limited liability)
兆易創新科技集團股份有限公司
GigaDevice Semiconductor Inc.
GLOBAL
OFFERING
Joint Sponsors, Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers


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IMPORTANT: If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice.
GigaDevice Semiconductor Inc.
ʮ̡
(A joint stock company incorporated in the People’ s Republic of China with limited liability)
GLOBAL OFFERING
Number of Offer Shares under the
Global Offering
: 28,915,800 H Shares (subject to the
Offer Size Adjustment Option and the
Over-allotment Option)
Number of Hong Kong Offer Shares : 2,891,600 H Shares (subject to
reallocation)
Number of International Offer Shares : 26,024,200 H Shares (subject to
reallocation, the Offer Size Adjustment
Option and the Over-allotment
Option)
Maximum Offer Price : HK$162.00 per H Share plus brokerage
of 1.0%, SFC transaction levy of
0.0027%, Stock Exchange trading fee
of 0.00565% and AFRC transaction
levy of 0.00015% (payable in full on
application in Hong Kong dollars and
subject to refund)
Nominal value : RMB1.00 per H Share
Stock Code : 3986
Joint Sponsors, Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners and Joint Lead Managers
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsib ility
for the contents of this prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for an y loss howsoever
arising from or in reliance upon the whole or any part of the contents of this prospectus.
A copy of this prospectus, having attached thereto the documents specified in “Appendix V — Documents Delivered to the Registrar of Companies and Avai lable
on Display”, has been registered by the Registrar of Companies in Hong Kong as required by Section 342C of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission and the Registrar of Companies in Hong Kong take no
responsibility as to the contents of this prospectus or any other documents referred to above.
The Offer Price is expected to be determined by agreement between the Overall Coordinators (for themselves and on behalf of the Underwriters), and the Company
on the Price Determination Date, which is expected to be on or before Friday, January 9, 2026 (Hong Kong time) and, in any event, not later than 12:00 noon on
Friday, January 9, 2026 (Hong Kong time). The Offer Price will not be more than HK$162.00 per Offer Share and is currently expected to be not less than HK$ 132.00
per Offer Share, unless otherwise announced. If, for any reason, the Offer Price is not agreed by 12:00 noon on Friday, January 9, 2026 (Hong Kong time) b etween
the Overall Coordinators (for themselves and on behalf of the Underwriters) and the Company, the Global Offering will not proceed and will lapse.
Applicants for Hong Kong Offer Shares may be required to pay, on application (subject to application channels), the maximum Offer Price of HK$162.00 f or each
Hong Kong Offer Share together with a brokerage fee of 1.0%, an SFC transaction levy of 0.0027%, a Stock Exchange trading fee of 0.00565% and an AFRC
transaction levy of 0.00015%, subject to refund if the Offer Price as finally determined is less than HK$162.00.
The Overall Coordinators, on behalf of the Underwriters, may, where considered appropriate and with the Company’s consent, reduce the number of Offe r
Shares being offered under the Global Offering and/or the indicative Offer Price range below that stated in this prospectus (which is HK$132.00 to
HK$162.00) at any time prior to the morning of the last day for lodging applications under the Hong Kong Public Offering. In such case, notices of the
reduction in the number of Offer Shares being offered under the Global Offering and/or the indicative Offer Price range will be published on the websit e
of the Stock Exchange at www.hkexnews.hk
and on the website of the Company at www.gigadevice.com as soon as practicable following the decision to make
such reduction, and in any event not later than the morning of the last day for lodging applications under the Hong Kong Public Offering. See “Structure
of the Global Offering” and “How to Apply for Hong Kong Offer Shares” sections for further details.
Prospective investors of the Hong Kong Offer Shares should note that the obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Ag reement
are subject to termination by Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters) if certain grounds arise prior to 8:00 a.m. on the
Listing Date. See “Underwriting” section for further details.
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities law in the United States and may not be offe red, sold,
pledged or transferred within the United States or to, or for the account or benefit of US persons (as defined in Regulation S), except in transactions e xempt from,
or not subject to, the registration requirements of the U.S. Securities Act. The Offer Shares may be offered, sold or delivered outside the United Stat es in offshore
transactions in reliance on Regulation S.
ATTENTION
The Company has adopted a fully electronic application process for the Hong Kong Public Offering. The Company will not provide printed copies of
this prospectus to the public in relation to the Hong Kong Public Offering.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk and the Company’s website at www.gigadevice.com . If you require
a printed copy of this prospectus, you may download and print from the website addresses above.
IMPORTANT
December 31, 2025


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IMPORTANT NOTICE TO INVESTORS
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong
Public Offering. We will not provide printed copies of this prospectus to the public
in relation to the Hong Kong Public Offering.
This prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the “HKEXnews > New Listings > New Listing
Information” section, and our website at www.gigadevice.com. If you require a
printed copy of this prospectus, you may download and print from the website
addresses above.
To apply for the Hong Kong Offer Shares, you may:
(1) apply online through the HK eIPO White Form service at www.hkeipo.hk ;
(2) apply through the HKSCC EIPO channel to electronically cause HKSCC
Nominees to apply on your behalf, including by instructing your broker or
custodian who is a HKSCC Participant will submit an EIPO application on
your behalf through HKSCC’s FINI system in accordance with your
instruction.
We will not provide any physical channels to accept any application for the Hong
Kong Offer Shares by the public. The contents of the electronic version of this
prospectus are identical to the printed prospectus as registered with the Registrar of
Companies in Hong Kong pursuant to Section 342C of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong).
If you are an intermediary , broker or agent , please remind your customers, clients
or principals, as applicable, that this prospectus is available online at the website
addresses above.
Please refer to the section headed “How to Apply for Hong Kong Offer Shares” in
this prospectus for further details of the procedures through which you can apply for the
Hong Kong Offer Shares electronically.
IMPORTANT
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Y our application through the HK eIPO White Form service or the HKSCC EIPO
channel must be for a minimum of 100 Hong Kong Offer Shares and in one of the
numbers set out in the table.
If you are applying through the HK eIPO White Form service, you may refer to
the table below for the amount payable for the number of H Shares you have selected.
Y ou must pay the respective maximum amount payable on application in full upon
application for Hong Kong Offer Shares.
If you are applying through the HKSCC EIPO channel, you are required to prefund
your application based on the amount specified by your broker or custodian ,a s
determined based on the applicable laws and regulations in Hong Kong.
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
HK$ HK$ HK$ HK$
100 16,363.38 2,000 327,267.55 10,000 1,636,337.70 300,000 49,090,131.00
200 32,726.75 2,500 409,084.43 20,000 3,272,675.40 400,000 65,453,508.00
300 49,090.13 3,000 490,901.31 30,000 4,909,013.10 500,000 81,816,885.00
400 65,453.51 3,500 572,718.20 40,000 6,545,350.80 600,000 98,180,262.00
500 81,816.89 4,000 654,535.08 50,000 8,181,688.50 700,000 114,543,639.00
600 98,180.26 4,500 736,351.96 60,000 9,818,026.20 800,000 130,907,016.00
700 114,543.64 5,000 818,168.86 70,000 11,454,363.90 900,000 147,270,393.00
800 130,907.01 6,000 981,802.62 80,000 13,090,701.60 1,000,000 163,633,770.00
900 147,270.40 7,000 1,145,436.39 90,000 14,727,039.30 1,200,000 196,360,524.00
1,000 163,633.76 8,000 1,309,070.15 100,000 16,363,377.00 1,445,800
(1) 236,581,704.67
1,500 245,450.65 9,000 1,472,703.94 200,000 32,726,754.00
Notes:
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is 50% of the Hong Kong
Offer Shares initially offered.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee
and AFRC transaction levy. If your application is successful, brokerage will be paid to the Exchange
Participants (as defined in the Listing Rules) or to the HK eIPO White Form Service Provider (for
applications made through the application channel of the HK eIPO White Form service) while the
SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction levy will be paid to
the SFC, the Stock Exchange and the AFRC, respectively.
No application for any other number of Hong Kong Offer Shares will be considered
and any such application is liable to be rejected.
IMPORTANT
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If there is any change in the following expected timetable of the Hong Kong
Public Offering, we will issue an announcement in Hong Kong to be published on the
Company’s website at www.gigadevice.com and the website of the Stock Exchange at
www.hkexnews.hk.
Hong Kong Public Offering commences ............................. .9:00 a.m. on
Wednesday, December 31, 2025
Latest time for completing electronic applications
under the HK eIPO White Form service through
the designated website at www.hkeipo.hk (2) ........................ 1 1:30 a.m. on
Thursday, January 8, 2026
Application lists open (3) ......................................... 1 1:45 a.m. on
Thursday, January 8, 2026
Latest time for (a) completing payment of HK eIPO
White Form applications by effecting internet banking
transfer(s) or PPS payment transfer(s) and (b) giving
electronic application instructions to HKSCC
(4) ................... .12:00 noon on
Thursday, January 8, 2026
If you are instructing your broker or custodian who is a HKSCC Participant will submit
an EIPO application on your behalf through HKSCC’s FINI system in accordance with your
instruction, you are advised to contact your broker or custodian for the earliest and latest time
for giving such instructions, as this may vary by broker or custodian.
Application lists close
(3) ........................................ .12:00 noon on
Thursday, January 8, 2026
Expected Price Determination Date ........................ .Friday, January 9, 2026
Announcement of the Offer Price, the level of
indications of interest in the International Offering,
the level of applications in the Hong Kong Public Offering
and the basis of allocation of the Hong Kong Offer Shares
to be published on the website of the Stock Exchange at
www.hkexnews.hk and on the Company’s website at
www.gigadevice.com (5) at or before .............................. 1 1:00 p.m. on
Monday, January 12, 2026
EXPECTED TIMETABLE (1)
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The results of allocations in the Hong Kong Public Offering (with successful applicants’
identification document numbers, where appropriate) to be available through a variety of
channels, including:
 in the announcement to be posted on our
website and the website of the Stock Exchange
at www.gigadevice.com and
www.hkexnews.hk , respectively .................a to r before 11:00 p.m. on
Monday, January 12, 2026
 Results of allocation for the Hong Kong Public
Offering will be available at the “Allotment Results”
page from the designated results of allocations
website at www.hkeipo.hk/IPOResult
(or www.tricor.com.hk/ipo/result )
with a “search by ID” function from ........................1 1:00 p.m. on
Monday, January 12, 2026 to
12:00 midnight on
Sunday, January 18, 2026
 from the allocation results telephone enquiry
line by calling +852 3691 8488
between 9:00 a.m. and 6:00 p.m. from ..........T uesday, January 13, 2026 to
Friday, January 16, 2026
(except Saturday,
Sunday and public holidays
in Hong Kong)
H Share certificates in respect of wholly or partially
successful applications to be dispatched or
deposited into CCASS on or before
(6)(8) ................. .Monday, January 12, 2026
HK eIPO White Form e-Auto Refund payment
instructions/refund checks in respect of (i) wholly
or partially successful applications if the final Offer
Price is less than the price payable on application
(if applicable) and (ii) wholly or partially unsuccessful
application under the Hong Kong Public Offering
to be dispatched on or before
(7)(8) ...................... T uesday, January 13, 2026
Dealings in the H Shares on the Stock Exchange
expected to commence at ....................................... .9:00 a.m. on
Tuesday, January 13, 2026
EXPECTED TIMETABLE (1)
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The application for the Hong Kong Offer Shares will commence on Wednesday,
December 31, 2025 through Thursday, January 8, 2026, being longer than normal
market practice of three and a half days. Investors should be aware that the dealings
in the Shares on the Stock Exchange are expected to commence on Tuesday, January
13, 2026.
Notes:
(1) Unless otherwise stated, all times and dates refer to Hong Kong local times and dates.
(2) Y ou will not be permitted to submit your application under the HK eIPO White Form service through the
designated website at www.hkeipo.hk after 11:30 a.m. on the last day for submitting applications. If you have
already submitted your application and obtained an application reference number from the designated website
prior to 11:30 a.m., you will be permitted to continue the application process (by completing payment of
application monies) until 12:00 noon on the last day for submitting applications, when the application lists
close.
(3) If there is/are a “black” rainstorm warning or a tropical cyclone warning signal number 8 or above and/or
Extreme Conditions in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Thursday, January
8, 2026, the application lists will not open or close on that day. For details, please refer to the paragraph headed
“How to Apply for Hong Kong Offer Shares — E. Bad Weather Arrangements” in this prospectus.
(4) Applicants who apply for Hong Kong Offer Shares by instructing their broker or custodian to give electronic
application instructions to HKSCC via FINI should refer to the paragraph headed “How to Apply for Hong
Kong Offer Shares — A. Application for Hong Kong Offer Shares — 2. Application Channels” in this
prospectus.
(5) None of the websites or any of the information contained on the websites forms part of this prospectus.
(6) H Share certificates will only become valid evidence of title at 8:00 a.m. on the Listing Date provided that the
Global Offering has become unconditional and the right of termination described in “Underwriting —
Underwriting Arrangements and Expenses — Hong Kong Public Offering — Grounds for Termination” has not
been exercised. Investors who trade H Shares on the basis of publicly available allocation details prior to the
receipt of H Share certificates or prior to the H Share certificates becoming valid evidence of title do so
entirely at their own risk.
(7) HK eIPO White Form e-Auto Refund payment instructions/refund cheques will be issued in respect of wholly
or partially unsuccessful applications pursuant to the Hong Kong Public Offering and also in respect of wholly
or partially successful applications in the event that the final Offer Price is less than the price payable per Offer
Share on application.
(8) Applicants being individuals who are eligible for personal collection may not authorize any other person to
collect on their behalf. If you are a corporate applicant which is eligible for personal collection, your
authorized representative must bear a letter of authorization from your corporation stamped with your
corporation’s chop. Both individuals and authorized representatives must produce evidence of identity
acceptable to our H Share Registrar at the time of collection.
Applicants who have applied for Hong Kong Offer Shares through the HKSCC EIPO channel should refer to
the paragraph headed “How to Apply for Hong Kong Offer Shares — D. Despatch/Collection of H Share
Certificates and Refund of Application Monies” in this prospectus for details.
Applicants who have applied through the HK eIPO White Form service and paid their applications monies
through single bank accounts may have refund monies (if any) dispatched to the bank account in the form of
HK eIPO White Form e-Auto Refund payment instructions. Applicants who have applied through the HK
eIPO White Form service and paid their application monies through multiple bank accounts may have refund
monies (if any) dispatched to the address as specified in their application instructions in the form of refund
checks in favor of the applicant (or, in the case of joint applications, the first-named applicant) by ordinary
post at their own risk.
Any uncollected H Share certificates and/or refund checks will be dispatched by ordinary post, at the
applicants’ risk, to the addresses specified in the relevant applications.
Further information is set out in the paragraphs headed “How to Apply for the Hong Kong Offer Shares — D.
Despatch/Collection of H Share Certificates and Refund of Application Monies.”
EXPECTED TIMETABLE (1)
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The above expected timetable is a summary only. For further details of the structure
of the Global Offering, including its conditions, and the procedures for applications for
Hong Kong Offer Shares, please see “Structure of the Global Offering” and “How to
Apply for Hong Kong Offer Shares” in this prospectus, respectively.
If the Global Offering does not become unconditional or is terminated in accordance
with its terms, the Global Offering will not proceed. In such case, the Company will make
an announcement as soon as practicable thereafter.
EXPECTED TIMETABLE (1)
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IMPORTANT NOTICE TO INVESTORS
This prospectus is issued by the Company solely in connection with the Hong Kong
Public Offering and does not constitute an offer to sell or a solicitation of an offer to buy
any security other than the Hong Kong Offer Shares offered by this prospectus pursuant
to the Hong Kong Public Offering. This prospectus may not be used for the purpose of,
and does not constitute, an offer or a solicitation of an offer to subscribe for or buy any
security in any other jurisdiction or in any other circumstances. No action has been taken
to permit a public offering of the Offer Shares or the distribution of this prospectus in any
jurisdiction other than Hong Kong. The distribution of this prospectus and the offering
and sale of the Offer Shares in other jurisdictions are subject to restrictions and may not
be made except as permitted under the applicable securities laws of such jurisdictions
pursuant to registration with or authorization by the relevant securities regulatory
authorities or an exemption therefrom.
You should rely only on the information contained in this prospectus to make your
investment decision. The Company has not authorized anyone to provide you with
information that is different from what is contained in this prospectus. Any information
or representation not made in this prospectus must not be relied on by you as having been
authorized by the Company, the Joint Sponsors, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters,
the capital market intermediaries, any of their respective directors, officers, employees,
agents, advisers or representatives, or any other person or party involved in the Global
Offering.
Page
Expected Timetable ................................................. i v
Contents .......................................................... viii
Summary ......................................................... 1
Definitions ........................................................ 2 0
Glossary of Technical Terms .......................................... 3 4
Forward-Looking Statements ......................................... 4 1
Risk Factors ....................................................... 4 3
Waivers and Exemption .............................................. 7 6
CONTENTS
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Information about This Prospectus and the Global Offering ................. 9 2
Directors and Parties Involved in the Global Offering ..................... 9 6
Corporate Information .............................................. 1 0 1
Industry Overview .................................................. 1 0 4
Regulatory Overview ................................................ 1 2 9
History and Corporate Structure ...................................... 1 6 8
Business .......................................................... 1 7 8
Financial Information ............................................... 2 4 7
Share Capital ...................................................... 3 0 9
Substantial Shareholders ............................................. 3 1 3
Cornerstone Investors ............................................... 3 1 4
Directors and Senior Management ..................................... 3 3 3
Future Plans and Use of Proceeds ...................................... 3 4 5
Underwriting ...................................................... 3 4 8
Structure of the Global Offering ....................................... 3 5 9
How to Apply for Hong Kong Offer Shares ............................. 3 7 2
Appendix I — Accountants’ Report .............................. I - 1
Appendix IA — Unaudited Interim Condensed Consolidated Financial
Information ................................... IA-1
Appendix II — Unaudited Pro Forma Financial Information ........... II-1
Appendix III — Summary of the Articles of Association ............... III-1
Appendix IV — Statutory and General Information ................... I V - 1
Appendix V — Documents Delivered to the Registrar of Companies and
Available on Display ............................. V - 1
CONTENTS
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This summary aims to give you an overview of the information contained in this
prospectus. As it is a summary, it does not contain all the information that may be
important to you and is qualified in its entirety by, and should be in conjunction with, the
full text of this prospectus. You should read the entire prospectus before you decide to
invest in the Offer Shares. There are risks associated with any investment. Some of the
particular risks in investing in the H Shares are set out in “Risk Factors” in this
prospectus. You should read that section carefully before you decide to invest in the H
Shares.
WHO WE ARE
We are an integrated circuit (“ IC”) design house for a diverse range of chips. We provide
customers with a wide range of chips, including Flash, niche dynamic random access memory
(“DRAM ”), micro control units (“ MCU”), analog chips and sensor chips that can be used in
consumer electronics, automobiles, industrial applications (such as industrial automation,
energy storage and battery management), personal computers (“ PC”) and servers, internet of
things (“ IoT”), network communications and other fields to meet various demands, as well as
a complete set of systems and solutions, including corresponding algorithms and software. We
adopt a fabless business model, which means that we focus on IC design and research and
development, while outsource the manufacturing of IC to external foundries and outsourced
semiconductor assembly and test (“ OSAT”) partners.
Founded in 2005, we have been deeply involved in the specialty memory chip industry
for 20 years and the MCU field for 14 years. We have become a prominent specialty memory
chip and MCU company in Chinese Mainland and have created specialty memory chip and
MCU brands with global influence. We always focus on value creation for customers and have
formed a high-quality customer base across the globe. According to Frost & Sullivan, in terms
of sales in 2024:
 NOR Flash . We ranked second globally and first in Chinese Mainland with a global
market share of 18.5%.
 Single-level Cell (“SLC”) NAND Flash . We ranked sixth globally and first in
Chinese Mainland with a global market share of 2.2%.
 Niche DRAM . We ranked seventh globally and second in Chinese Mainland with a
global market share of 1.7%.
 MCU. We ranked eighth globally and first in Chinese Mainland with a global market
share of 1.2%.
 Fingerprint sensor chip . We ranked second in Chinese Mainland with a market
share in Chinese Mainland of around 10%.
SUMMARY
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Company C and Company F, which ranked first in the global SLC NAND Flash market
and niche DRAM market in terms of sales in 2024, respectively, achieved a dominant market
position with market share of 35.2% and 30.8% in their respective market. See “Industry
Overview — Analysis of the Competitive Landscape of the Company’s Industries.”
OUR BUSINESS
We continue to explore market demands with high quality customers across the globe,
complete product definition, and provide the optimal “Sense, Memory, Compute, Control and
Connectivity” ( ชπၑછஹ) synergistic ecological solutions with our diverse product portfolio.
Our proprietary chips and innovative solutions are widely applied in various smart devices,
exhibiting vast future prospects.
Product Ecology of
“Sense, Memory, Compute,
Control and Connectivity”
Analog chips Flash
Memory
Control
Compute
Connectivity
Sense
Sensors
DRAM
Wireless
connectivity
 chips MCU
Signalinterconnectivity
Sensingofexternalinformation Memory of key information
Computingcontrolsystem
Specialty Memory Chips: Diverse Product Portfolio Covering NOR Flash, NAND Flash
and Niche DRAM with Industry Breakthroughs
Specialty memories refers to memory products applied in specific industries with unique
operational demands, mainly including niche DRAM, SLC NAND Flash and NOR Flash,
which are characterized by (i) serving a broad and diverse range of downstream applications
(such as consumer electronics, automobiles, industrial applications (for example, industrial
automation, energy storage and battery management), PC and servers, IoT and network
communications); and (ii) varying requirements across different downstream sectors and
application scenarios in terms of storage capacity, bandwidth, temperature thresholds and
SUMMARY
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voltage. In contrast, commodity memories mainly include 3D NAND Flash, mainstream
DRAM, and high bandwidth memory, which are characterized by: (i) larger capacity and higher
bandwidth; and (ii) targeting concentrated, high-volume downstream markets such as
smartphones, PCs and servers, where individual sectors demand significant production
capacity.
Our specialty memory chips include three product lines: NOR Flash, NAND Flash and
niche DRAM. NOR Flash allows random access to data, enabling fast and reliable code
execution directly from the memory, making it widely used in embedded systems that require
frequent and fast access to executable code. NAND Flash offers large storage capacity, fast
erase/write speeds and long lifespan, making it suitable for a wide range of large-capacity
storage applications. Niche DRAM is designed for applications with specific requirements for
performance, reliability or operating environments, as opposed to mass-produced mainstream
DRAM. Those form a broad matrix of advanced products that can meet customers’ demands for
capacity, voltage and packaging for different applications. We have achieved wide coverage in
consumer electronics, industrial applications (such as industrial automation, energy storage and
battery management), communications, automotive electronics and other fields. See “Business
– Our Business – Specialty Memory Chips: Diverse Product Portfolio Covering Nor Flash,
NAND Flash and Niche DRAM with Industry Breakthroughs.”
MCU: Building a Comprehensive Portfolio of MCU with Wide Selection of Over 700
Products
We focus on 32-bit MCU based on ARM
® and RISC-V structures. We provide MCU
featuring high performance, low power consumption and a high cost-to-performance ratio. Our
MCU support a wide range of applications, including industrial applications (such as industrial
automation, energy storage and battery management), consumer electronics and handheld
devices, automotive electronics (such as car navigation, telematics box (“ T-BOX”), instrument
and infotainment systems) and computing. Based on the existing 63 series and more than 700
products, we endeavor to further improve R&D and engineering efficiency and continue to
broaden our product lines. See “Business – Our Business – MCU: Building a Comprehensive
Portfolio of MCU with Wide Selection of over 700 Products.”
Analog and Sensor Chips: Organic Growth Combined with Strategic Acquisition
We primarily offer analog chips for general power supplies (such as direct current to
direct current (“ DC-DC ”) and low-dropout regulator (“ LDO”)), special power supplies (such
as headphone charging box power supplies and sweeping robot power supplies), motor drive
products and temperature and humidity sensors. In 2024, we acquired XySemi, a leading
company in the lithium battery protection sector, to create strategic synergies with our own
analog chips business in terms of technology, products, marketing, sales and supply chain. Our
sensor chip offering mainly includes fingerprint recognition chips and touch sensor chips. We
aim to continue to promote product optimization and upgrading and further expand our product
portfolio in PC, wearable, mobile health, IoT and other fields.
SUMMARY
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OUR MARKET OPPORTUNITIES AND COMPETITION
Edge AI is growing rapidly. According to Frost & Sullivan, 2025 marks the start of a
major boom in edge computing power. Edge AI expands how AI can be applied by turning
traditional devices into smart systems capable of making their own decisions. This shift is
creating new opportunities for companies across these sectors. As our products play an
important role for enabling real-time, low-power and reliable AI interference at the edge, the
rapid growth trend of AI is driving the demand for our products. With our diversified product
portfolio and “Sense, Memory, Compute, Control and Connectivity” synergistic ecological
solutions, we are able to rapidly respond to customers’ evolving needs. This enables us to
capture the growth potential brought by the AI growth. See “Business – Overview – Our
Market Opportunities.”
However, we operate in a highly competitive market. In term of the sales in 2024, the top
three players in NOR Flash, SLC NAND Flash and niche DRAM markets accounted for 63.2%,
69.4% and 69.1% of their respective total market shares. In particular, Company C and
Company F, which ranked first in the global SLC NAND Flash market and niche DRAM
market in terms of sales in 2024, respectively, achieved a dominant market position with
market share of 35.2% and 30.8% in their respective market. Our ability to maintain and grow
our market share depends on us competing effectively against our competitors. The competitive
landscape is shaped by multiple factors, including the growth of our customers and their
respective industries, advancements in technology, emergence of new materials or technology,
production capacity, regulatory changes and general economic conditions. See “Industry
Overview.”
RESEARCH AND DEVELOPMENT
R&D are critical to maintaining our market position and to the sustained growth of our
business by ensuring that we can continue to meet the evolving downstream needs of our
products. We have adopted the integrated product development (“ IPD”) framework that
integrates our product business lines into a unified R&D process, guided by the key principles
of market-driven development, quality-first, cross-department collaboration and continuous
improvement. We are devoted to in-house R&D of core IPs for our products, while also
sourcing mature licensed IPs externally to supplement our techniques and improve the overall
performance of our products. See “Business – Research and Development.”
SALES AND MARKETING
We sell our products mainly through distributors, while we also make direct sales to
certain customers at their requests. We believe that consistently delivering high-quality
products on time that meet and exceed our users’ expectations is the most efficient sales and
marketing approach for us. As such, our sales and marketing activities are focused on
maintaining and expanding the scope of our strategic relationships with our direct and indirect
customers. Under our IPD framework, our sales teams are actively involved in our product
R&D process to ensure that we can deliver satisfactory products to our direct and indirect
customers. See “Business – Sales and Marketing.”
SUMMARY
–4–


--- page 15 ---
CUSTOMERS AND SUPPLIERS
Our Customers
Our customers are distributors and direct sales customers which mainly include
manufacturers and sellers of electronic components.
Sales to our five largest customers of each year/period of the Track Record Period
amounted to RMB2,380.6 million, RMB1,766.5 million, RMB2,444.6 million and
RMB1,218.5 million in 2022, 2023 and 2024 and the six months ended June 30, 2025,
respectively, accounting for 29.3%, 30.6%, 33.3% and 29.4% of our total sales in the respective
years/period. Sales to our largest customer of each year/period of the Track Record Period
amounted to RMB575.7 million, RMB410.5 million, RMB558.3 million and RMB321.9
million in 2022, 2023 and 2024 and the six months ended June 30, 2025, respectively,
accounting for 7.1%, 7.1%, 7.6% and 7.8% of our total sales in the respective years/period.
During the Track Record Period, to the best knowledge of our Directors, none of our Directors,
their associates or any of our current Shareholders (who, to the knowledge of our Directors,
own more than 5% of our share capital) had any interest in our five largest customers of any
year/period of the Track Record Period that are required to be disclosed under the Listing
Rules.
Our Suppliers
Our suppliers are mainly our foundry partners for IC fabrication and OSA T partners for
IC testing and packaging.
Purchases from our five largest suppliers of each year/period of the Track Record Period
amounted to RMB4,090.6 million, RMB3,081.9 million, RMB3,696.9 million and
RMB2,007.8 million in 2022, 2023 and 2024 and the six months ended June 30, 2025,
respectively, accounting for 73.4%, 71.0%, 70.2% and 68.9% of our total purchases in the
respective years/period. Purchases from our largest supplier of each year/period of the Track
Record Period amounted to RMB1,369.8 million, RMB1,320.9 million, RMB1,356.2 million
and RMB765.8 million in 2022, 2023 and 2024 and the six months ended June 30, 2025,
respectively, accounting for 24.6%, 30.4%, 25.8% and 26.3% of our total purchases in the
respective years/period. Except for Suppliers C and F, as disclosed in “Business – Production,
Procurement, Inventory and Logistics – Our Suppliers – Top Five Suppliers,” during the Track
Record Period, to the best knowledge of our Directors, none of our Directors, their associates
or any of our current Shareholders (who, to the knowledge of our Directors, own more than 5%
of our share capital) had any interest in our five largest suppliers of any year/period of the
Track Record Period that are required to be disclosed under the Listing Rules.
SUMMARY
–5–


--- page 16 ---
OUR STRENGTHS
We believe the following advantages position us well to seize future industry
opportunities and achieve sustained growth.
 Our diverse range of chip design and strong R&D capabilities;
 A stable and thriving global partnership ecosystem and an increasingly deepened
global presence;
 Exceptional supply chain and service capabilities, enabling efficient and high-
quality delivery; and
 Forward-looking management team and an engineer culture surrounding continuous
innovation
OUR STRATEGIES
We will implement the following strategies:
 Fully embrace AI to seize the unprecedented opportunities in industry development;
 Diversification strategy and multi-track growth underpinning stable and sustainable
operations;
 Advancing technological innovation, broadening product portfolio and expanding
into emerging fields;
 Pursuing external growth through strategic and industry-related partnerships,
investments and acquisitions;
 Accelerate our globalization to build a world-class technology brand; and
 Further our global top talent strategy to energize organizational vitality.
SUMMARY
–6–


--- page 17 ---
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
The following tables sets forth summary financial data from our consolidated financial
information during the Track Record Period. The summary financial data set forth below
should be read together with, and is qualified in its entirety by reference to, the consolidated
financial statements as set out in the Accountants’ Report in Appendix I to this prospectus,
including the related notes. Our consolidated financial information was prepared in accordance
with IFRS Accounting Standards.
Results of Operations
Y ear Ended December 31, Six Months Ended June 30,
2022 2023 2024 2024 2025
(in RMB thousands, except for percentages)
(Unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,129,992 100.0% 5,760,823 100.0% 7,355,978 100.0% 3,609,037 100.0% 4,150,309 100.0%
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,432,776) (54.5)% (4,014,515) (69.7)% (4,732,760) (64.3)% (2,308,838) (64.0)% (2,617,583) (63.1)%
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H11183,697,216 45.5% 1,746,308 30.3% 2,623,218 35.7% 1,300,199 36.0% 1,532,726 36.9%
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118519,300 6.4% 424,401 7.4% 549,914 7.5% 240,110 6.7% 199,744 4.8%
Selling and distribution
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(265,878) (3.3)% (270,498) (4.7)% (370,907) (5.0)% (170,496) (4.7)% (224,353) (5.4)%
Administrative expenses /H1118 (498,549) (6.1)% (397,553) (6.9)% (525,678) (7.1)% (239,438) (6.6)% (313,747) (7.6)%
Research and
development expenses /H1118 (935,584) (11.5)% (989,953) (17.2)% (1,122,389) (15.3)% (588,268) (16.3)% (567,680) (13.7)%
Impairment loss on trade
and other receivables /H1118/H1118 (743) (0.0)% (820) (0.0)% (3,667) (0.0)% (2,133) (0.1)% (465) (0.0)%
Impairment loss on
property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – – – – (3,810) (0.1)%
Impairment loss on
intangible assets /H1118/H1118/H1118/H1118 – – (2,630) (0.0)% – – – – (1,903) (0.0)%
Impairment loss on
goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(241,491) (3.0)% (373,372) (6.5)% – – – – – –
Profit from operations /H1118/H11182,274,271 28.0% 135,883 2.4% 1,150,491 15.6% 539,974 15.0% 620,512 15.0%
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,889) (0.1)% (7,115) (0.1)% (19,253) (0.3)% (9,313) (0.3)% (14,087) (0.3)%
Share of profits less
losses of associates /H1118/H1118/H1118(3,957) (0.0)% (4,020) (0.1)% (7,575) (0.1)% (2,784) (0.1)% (10,346) (0.2)%
Profit before taxation /H1118/H11182,262,425 27.8% 124,748 2.2% 1,123,663 15.3% 527,877 14.6% 596,079 14.4%
Income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(209,543) (2.6)% 36,393 0.6% (22,782) (0.3)% (10,877) (0.3)% (8,244) (0.2)%
Profit for the
year/period /H1118/H1118/H1118/H1118/H1118/H11182,052,882 25.3% 161,141 2.8% 1,100,881 15.0% 517,000 14.3% 587,835 14.2%
SUMMARY
–7–


--- page 18 ---
Y ear Ended December 31, Six Months Ended June 30,
2022 2023 2024 2024 2025
(in RMB thousands, except for percentages)
(Unaudited)
Attributable to:
Equity shareholders of
the Company /H1118/H1118/H1118/H1118/H11182,052,882 25.3% 161,141 2.8% 1,102,543 15.0% 517,000 14.3% 575,476 13.9%
Non-controlling
interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – (1,662) (0.0)% – – 12,359 0.3%
Non-IFRS Measures
To supplement our consolidated financial statements that are presented in accordance
with IFRS Accounting Standards, we also use non-IFRS measures, including adjusted net profit
(a non-IFRS measure) and adjusted net profit margin (a non-IFRS measure), as additional
financial metrics, which are not required by, or presented in accordance with IFRS Accounting
Standards. We believe that these non-IFRS measures facilitate comparisons of operating
performance from period to period by eliminating potential impact of certain items. We believe
that these measures provide useful information to investors and others in understanding and
evaluating our consolidated financial statements in the same manner as they help our
management. However, our presentation of adjusted net profit (a non-IFRS measure) and
adjusted net profit margin (a non-IFRS measure) may not be comparable to similar item
measures presented by other companies. The use of these non-IFRS measures has limitations
as an analytical tool, and you should not consider them in isolation from, or as substitute for
analysis of, our consolidated financial statements or financial condition as reported under IFRS
Accounting Standards. We define adjusted net profit (a non-IFRS measure) as profit for the
year/period adjusted for share-based payments (a non-cash item) and listing expenses. We
define adjusted net profit margin (a non-IFRS measure) as adjusted net profit (a non-IFRS
measure) as a percentage of our total revenue.
Y ear Ended December 31,
Six Months Ended
June 30,
2022 2023 2024 2024 2025
(in RMB thousands, except for percentages)
(Unaudited)
Profit for the year/period /H1118/H1118/H1118/H1118/H11182,052,882 161,141 1,100,881 517,000 587,835
Adjusted for:
Share-based payment expenses /H1118 203,181 97,138 159,034 64,754 84,060
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 5 6 3
Adjusted net profit
(a non-IFRS measure) /H1118/H1118/H1118/H1118/H11182,256,063 258,279 1,259,915 581,754 672,458
Adjusted net profit margin
(a non-IFRS measure) /H1118/H1118/H1118/H1118/H1118/H111827.7% 4.5% 17.1% 16.1% 16.2%
SUMMARY
–8–


--- page 19 ---
Revenue
During the Track Record Period, we primarily generated revenue from the sales of
specialty memory chips, MCU, analog chips and sensor chips. Our revenue was recorded net
of rebate.
By Product
Y ear Ended December 31, Six Months Ended June 30,
2022 2023 2024 2024 2025
(in RMB thousands, except for percentages)
(Unaudited)
Specialty memory chips /H1118 4,825,856 59.3% 4,077,311 70.8% 5,194,173 70.6% 2,604,520 72.2% 2,844,934 68.5%
NOR Flash /H1118/H1118/H1118/H1118/H1118/H1118/H11183,539,704 43.5% 2,995,404 52.0% 3,754,233 51.0% 1,833,014 50.8% 2,034,156 48.9%
DRAM (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118998,790 12.3% 809,973 14.1% 1,073,145 14.6% 559,532 15.5% 637,197 15.4%
NAND Flash /H1118/H1118/H1118/H1118/H1118/H1118287,362 3.5% 271,934 4.7% 366,795 5.0% 211,974 5.9% 173,581 4.2%
MCU /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,825,357 34.8% 1,312,209 22.8% 1,690,547 23.0% 802,115 22.2% 959,106 23.1%
Sensor chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118434,974 5.4% 352,449 6.1% 448,300 6.1% 192,173 5.3% 193,193 4.7%
Analog chips /H1118/H1118/H1118/H1118/H1118/H1118/H11183,851 0.0% 4,604 0.1% 15,468 0.2% 3,098 0.1% 152,276 3.7%
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,954 0.5% 14,250 0.2% 7,490 0.1% 7,131 0.2% 800 0.0%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,129,992 100.0% 5,760,823 100.0% 7,355,978 100.0% 3,609,037 100.0% 4,150,309 100.0%
Notes:
(1) Including the revenue from sales of DRAM designed and manufactured by CXMT Group in 2022 and the first
half of 2023.
(2) Mainly including technical services and license fees for our IPs.
Y ear Ended December 31, Six Months Ended June 30,
2022 2023 2024 2024 2025
Sales
volume
Average
Selling
Price (1)
Sales
volume
Average
Selling
Price (1)
Sales
volume
Average
Selling
Price (1)
Sales
volume
Average
Selling
Price (1)
Sales
volume
Average
Selling
Price (1)
(Unit’000) (RMB) (Unit’000) (RMB) (Unit’000) (RMB) (Unit’000) (RMB) (Unit’000) (RMB)
(Unaudited)
Specialty memory
chips /H1118/H1118/H1118/H1118/H1118/H1118/H11182,259,645 2.14 2,655,166 1.54 3,553,167 1.46 1,782,319 1.46 2,147,891 1.32
NOR Flash /H1118/H1118/H1118/H11182,180,800 1.62 2,532,962 1.18 3,335,830 1.13 1,660,268 1.10 2,034,441 1.00
DRAM (2) /H1118/H1118/H1118/H1118/H111844,987 22.20 66,527 12.18 133,453 8.04 69,429 8.06 73,210 8.70
NAND Flash /H1118/H1118/H111833,858 8.49 55,677 4.88 83,884 4.37 52,622 4.03 40,240 4.31
MCU /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118343,535 8.22 276,089 4.75 409,251 4.13 190,535 4.21 242,546 3.95
Sensor chips /H1118/H1118/H1118/H1118/H1118157,130 2.77 178,811 1.97 267,983 1.67 107,633 1.79 119,979 1.61
Analog chips /H1118/H1118/H1118/H11182,796 1.38 11,625 0.40 131,183 0.12 34,784 0.09 958,420 0.16
Notes:
(1) Average selling price is calculated through dividing revenue by the relevant sales volume during the same
year/period, which represented the average price at which our products were sold to our customers.
(2) Including the sales of DRAM designed and manufactured by CXMT Group in 2022 and the first half of 2023.
SUMMARY
–9–


--- page 20 ---
Gross Profit and Gross Profit Margin
By Product
Y ear Ended December 31, Six Months Ended June 30,
2022 2023 2024 2024 2025
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
(in RMB thousands, except for percentages)
(Unaudited)
Specialty memory
chips /H1118/H1118/H1118/H1118/H1118/H1118/H11181,934,749 40.1% 1,344,959 33.0% 2,091,500 40.3% 1,022,009 39.2% 1,095,377 38.5%
MCU /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,833,903 64.9% 569,404 43.4% 621,085 36.7% 309,217 38.6% 357,879 37.3%
Sensor chips /H1118/H1118/H1118/H1118/H111871,168 16.4% 56,382 16.0% 73,797 16.5% 38,340 20.0% 30,941 16.0%
Analog chips /H1118/H1118/H1118/H1118959 24.9% (1,923) (41.8%) 1,628 10.5% 465 15.0% 59,361 39.0%
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,857 84.7% 14,193 99.6% 7,343 98.0% 7,035 98.7% 775 96.9%
Subtotal/Overall /H1118/H11183,874,636 47.7% 1,983,015 34.4% 2,795,353 38.0% 1,377,066 38.2% 1,544,333 37.2%
Write-down of
inventories /H1118/H1118/H1118/H1118(177,420) N/A (236,707) N/A (172,135) N/A (76,867) N/A (11,607) N/A
Total/Overall /H1118/H1118/H1118/H11183,697,216 45.5% 1,746,308 30.3% 2,623,218 35.7% 1,300,199 36.0% 1,532,726 36.9%
The business and financial performance of participants in IC markets are closely tied to
the cyclical nature of the semiconductor industry. See “Industry Overview – Industry Cycle”
and “Financial Information – Principal Components of Results of Operations – Revenue.” As
affected by such industry cycle, the average selling prices of our products declined notably
from 2022 to 2023. As a result, our revenue decreased from RMB8,130.0 million in 2022 to
RMB5,760.8 million in 2023. Entering into 2024, as the industry began to show signs of an
uneven recovery cross certain end market, the downward trend of the market price of IC
products was at a slower rate, together with an increase in the sales volume of our products
primarily attributable to our efforts in expanding the markets, our revenue increased from
RMB5,760.8 million in 2023 to RMB7,356.0 million in 2024. Our revenue increased from
RMB3,609.0 million in the six months ended June 30, 2024 to RMB4,150.3 million in the six
months ended June 30, 2025, primarily due to the further recovery of the markets and an
increase in our sales of analog chips as a result of our acquisition of XySemi by the end of
2024.
Moreover, the sustained increase in selling prices of IC products during 2021 and 2022
caused by supply shortage then also led to a corresponding rise in cost of wafer, packaging and
testing. However, there is typically a time lag before changes in those costs are fully reflected
in cost of sales, due to factors such as existing inventory, long-term supply agreements, and
production lead times. As such, coupled with the impact of decrease in revenue, our gross profit
decreased by 52.8% from RMB3,697.2 million in 2022 to RMB1,746.3 million in 2023, and
our gross profit margin decreased from 45.5% in 2022 to 30.3% in 2023.
SUMMARY
–1 0–


--- page 21 ---
Our gross profit increased by 50.2% from RMB1,746.3 million in 2023 to RMB2,623.2
million in 2024, primarily due to a 27.7% increase in our total revenue and an increase in gross
profit margin from 30.3% in 2023 to 35.7% in 2024. Our gross profit further increased from
RMB1,300.2 million in the six months ended June 30, 2024 to RMB1,532.7 million in the six
months ended June 30, 2025, primarily due to a 15.0% increase in our total revenue and an
increase in gross profit margin from 36.0% in the six months ended June 30, 2024 to 36.9%
in the six months ended June 30, 2025.
Our net profits decreased from RMB2,052.9 million in 2022 to RMB161.1 million in
2023, primarily due to (i) the decrease in gross profits as mentioned above, and (ii) the
increased selling and distribution expenses and research and development expenses in both
absolute amount and as a percentage of our total revenue, primarily attributable to our
continuous sales and marketing efforts and enhanced R&D activities. Our net profits increased
from RMB161.1 million in 2023 to RMB1,100.9 million in 2024, which further increased from
RMB517.0 million in the six months ended June 30, 2024 to RMB587.8 million in the six
months ended June 30, 2025, primarily due to the increase in gross profit as mentioned above.
See “Financial Information – Period-to-period Comparison of Results of Operations.”
Summary of Consolidated Statements of Financial Position
As of December 31,
As of
June 30,
2022 2023 2024 2025
(in RMB thousands)
Non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,232,044 4,852,823 6,794,033 6,938,297---------- ---------- ---------- ----------
Current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,414,643 11,602,957 12,434,797 12,861,770---------- ---------- ---------- ----------
Current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,196,664 986,175 2,330,507 2,155,630---------- ---------- ---------- ----------
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,217,979 10,616,782 10,104,290 10,706,140
Total assets less current liabilities /H1118/H111815,450,023 15,469,605 16,898,323 17,644,437
Non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118262,883 270,032 219,546 209,191
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,187,140 15,199,573 16,678,777 17,435,246
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,187,140 15,199,573 16,678,777 17,435,246
Total equity attributable to
shareholders of the Company /H1118/H111815,187,140 15,199,573 16,498,505 17,239,898
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 180,272 195,348
SUMMARY
–1 1–


--- page 22 ---
Our net assets remained relatively stable at RMB15,187.1 million and RMB15,199.6
million as of December 31, 2022 and 2023. Our net assets increased from RMB15,199.6
million as of December 31, 2023 to RMB16,498.5 million as of December 31, 2024, primarily
due to the total comprehensive income in 2024 of RMB1,312.2 million. Our net assets
increased from RMB16,498.5 million as of December 31, 2024 to RMB17,239.9 million as of
June 30, 2025, primarily due to the comprehensive income in the six months ended June 30,
2025 of RMB727.9 million.
See “Financial Information – Selected Items of Consolidated Statements of Financial
Position” and “Consolidated Statements of Changes in Equity” in the Accountants’ Report in
Appendix I to this prospectus.
Cash Flows
The table below sets forth our cash flows for the years/period indicated.
Y ear Ended December 31,
Six Months
Ended
June 30,
2022 2023 2024 2025
(in RMB thousands)
Operating profit before working
capital changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,936,269 965,034 1,658,569 952,540
Changes in working capital /H1118/H1118/H1118/H1118/H1118/H1118(1,617,074) 229,792 368,892 59,469
Income tax (paid)/refunded /H1118/H1118/H1118/H1118/H1118/H1118(369,504) (8,077) 4,769 (54,188)
Net cash generated from operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118949,691 1,186,749 2,032,230 957,821
Net cash used in investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(43,724) (294,903) (669,335) (1,762,846)
Net cash (used in)/generated from
financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(780,313) (572,601) 480,384 (453,838)
Net increase/(decrease) in cash
and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118125,654 319,245 1,843,279 (1,258,863)
Cash and cash equivalents at the
beginning of the year/period /H1118/H1118/H11186,546,991 6,787,205 7,130,888 9,104,159
Effects of foreign exchange rate
changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118114,560 24,438 129,992 (15,619)
Cash and cash equivalents at
the end of the year/period /H1118/H1118/H1118/H11186,787,205 7,130,888 9,104,159 7,829,677
See “Financial Information – Cash Flow.”
SUMMARY
–1 2–


--- page 23 ---
KEY FINANCIAL RATIOS
Y ear Ended/As of December 31,
Six Months
Ended/
As of
June 30,
2022 2023 2024 2025
Gross profit margin (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845.5% 30.3% 35.7% 36.9%
Profit margin (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825.3% 2.8% 15.0% 14.2%
Adjust net profit margin
(a non-IFRS measure) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827.7% 4.5% 17.1% 16.2%
Current ratio (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189.5 11.8 5.3 6.0
Quick ratio (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187.7 9.7 4.3 4.9
Notes:
(1) Gross profit margin is calculated as revenue minus cost of sales divided by revenue, then multiplied by 100%.
(2) Profit margin is calculated as net profit divided by revenue, then multiplied by 100%.
(3) Current ratio is calculated based on the total current assets divided by the total current liabilities as at the end
of the respective years/period.
(4) Quick ratio is calculated as total current assets less inventories divided by the total current liabilities as at the
end of the respective years/period.
LISTING EXPENSES
Listing expenses represent professional fees, underwriting commission and fees incurred
in connection with the Listing and the Global Offering. Our listing expenses are estimated to
be approximately HK$70.0 million (including underwriting commission) accounting for 1.65%
of the gross proceeds of the Global Offering (assuming that an Offer Price of HK$147.00 per
Share (being the mid-point of the Offer Price range stated in this prospectus), and no exercise
of the Offer Size Adjustment Option and Over-allotment Option). Among our listing expenses,
approximately HK$64.5 million is directly attributable to the issuance of Shares and will be
charged to equity upon completion of the Listing, and approximately HK$5.5 million has been
or will be charged to our consolidated statements of profit or loss and other comprehensive
income. The listing expenses we expect to incur would consist of approximately HK$35.7
million underwriting related expenses and fees (including underwriting commissions, SFC
transaction levy, Stock Exchange trading fee and AFRC transaction levy), approximately
HK$26.4 million non-underwriting-related expenses and fees including fees for the Joint
Sponsors, legal advisors and reporting accountants and approximately HK$7.9 million for
other non-underwriting-related fees and expenses. During the Track Record Period, we
incurred RMB15.7 million of listing expenses, among which, RMB15.1 million is directly
attributable to the issue of shares and will be deducted from equity upon completion of the
Listing and RMB0.6 million was charged to our consolidated statements of profit or loss and
other comprehensive income.
SUMMARY
–1 3–


--- page 24 ---
The listing expenses above are the latest practicable estimate for reference only, and the
actual amount may differ from this estimate.
RISK FACTORS
We face risks including those set out in the section headed “Risk Factors.” As different
investors may have different interpretations and criteria when determining the significance of
risks, you should read the “Risk Factors” section in its entirety before you decide to invest in
our H Shares. Some of the major risks that we face include:
 If we fail to properly anticipate or respond to changing market conditions, or
develop and introduce new or enhanced products on a timely basis, our ability to
attract and retain customers could be impaired and our competitive position could be
harmed;
 Our performance is subject to fluctuations in demand from downstream industries
that adopt our products and the prices of the end products;
 The markets in which we compete have historically experienced downturns with
declines in average selling prices;
 Our R&D efforts are not guaranteed to yield the results we anticipate;
 We rely on third parties for IC fabrication, testing and packaging;
FUTURE PLANS AND USE OF PROCEEDS
Assuming an Offer Price of HK$147.00 per H Share (being the midpoint of the range of
the Offer Price stated in this prospectus), we estimate that we will receive net proceeds of
approximately HK$4,180.7 million from the Global Offering after deducting the underwriting
commissions and other estimated expenses in connection with the Global Offering (assuming
the Offer Size Adjustment Option and the Over-allotment Option are not exercised). We intend
to use our proceeds for the purposes and in the amounts set forth below.
 approximately 40.0%, or HK$1,672.3 million, will be used for continuous
enhancement of our R&D capabilities;
 approximately 35.0%, or HK$1,463.2 million, will be used for the strategic and
industry-related investment and acquisition;
 approximately 9.0%, or HK$376.3 million, will be used for our global strategic
expansion and strengthening our global presence, including the enhancement of our
global marketing and service network;
SUMMARY
–1 4–


--- page 25 ---
 approximately 6.0%, or HK$250.8 million, will be used for the improvement of
operational efficiency; and
 approximately 10.0%, or HK$418.1 million, will be used for working capital and
other general corporate purposes.
See “Future Plans and Use of Proceeds.”
GLOBAL OFFERING STATISTICS
The statistics in the following table are based on the assumptions that (i) the Global
Offering has been completed and 28,915,800 H Shares are newly issued in the Global Offering,
(ii) the Offer Size Adjustment Option and the Over-allotment Option for the Global Offering
are not exercised, and (iii) no additional Shares are issued pursuant to the Share Incentive
Plans:
Based on an
Offer Price
of HK$132.00
per H Share
Based on an
Offer Price
of HK$162.00
per H Share
Market value of our H Shares (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$3,816.9
million
HK$4,684.4
million
Market value of our A shares (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$151,380.5
million
HK$151,380.5
million
Total market capitalization (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$155,197.4
million
HK$156,064.9
million
Unaudited pro forma adjusted net tangible assets per
Share (4)(5) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
HK$30.89
(RMB28.02)
HK$32.14
(RMB29.15)
Notes:
(1) The calculation of market value of our H shares is based on 28,915,800 H Shares expected to be issued
immediately following the completion of the Global Offering (assuming the Offer Size Adjustment Option and
the Over-allotment Option are not exercised).
(2) The calculation of market value of our A shares is based on the average closing price of the A Shares of
RMB205.77 per A Share for the five business days immediately preceding the Latest Practicable Date and the
total share capital of 667,849,351 A Shares as of the Latest Practicable Date and excluding 603,020 A Shares
held by us as treasury shares as of the Latest Practicable Date. For illustrative purpose, the market value of
our A shares have been converted into HK$ with an exchange rate of RMB1 to HK$1.10255.
(3) The total market capitalization of the Company is based on 28,915,800 H Shares expected to be issued
immediately following the completion of the Global Offering (assuming the Offer Size Adjustment Option and
the Over-allotment Option are not exercised) and the total share capital of 667,849,351 A Shares as of the
Latest Practicable Date and excluding 603,020 A Shares held by us as treasury shares as of the Latest
Practicable Date (representing an aggregate of 696,162,131 Shares).
SUMMARY
–1 5–


--- page 26 ---
(4) The unaudited pro forma adjusted net tangible assets per Share is arrived at after adjustments referred to in
“Appendix II – Unaudited Pro Forma Financial Information” in this prospectus and on the basis that
692,028,799 Shares (being 664,059,190 Shares in issue as of June 30, 2025, deducting repurchased ordinary
shares held by us and unvested restricted shares under the 2021 Restricted Share Incentive Plan as at June 30,
2025 of 946,191 Shares and adding 28,915,800 H Shares to be issued pursuant to the Global Offering) were
in issue immediately following the completion of the Global Offering, and does not take into account any H
shares which may be issued upon the exercise of the Offer Size Adjustment Option and the Over-allotment
Option and any Shares that may be issued under the Share Incentive Plans.
The difference in number of Shares used to calculate the total capitalization and the unaudited pro forma
adjusted net tangible assets per Share is due to 343,171 unvested restricted shares under the 2021 Restricted
Share Incentive Plan as of June 30, 2025, and 3,819,375 ordinary shares issued and 29,214 restricted shares
cancelled subsequent to June 30, 2025.
(5) No adjustment has been made to reflect any trading results or other transactions of us entered into subsequent
to June 30, 2025.
DIVIDEND POLICY
Our declaration and payment of dividends are subject to PRC laws and regulations,
including the PRC Company Law () and the No. 3 Guideline for
the Supervision of Listed Companies – Cash Dividend Distribution of Listed Companies (2025
Revision) (ˏୋ3໮–ߎ2025ࠈࡌ)) and the Articles of
Association.
We have established our dividend policy as prescribed in the Articles of Association.
Under the condition that the Company’s normal production and operational funding needs are
met, if there have been no significant adverse changes in the company’s external business
environment or operating conditions, and the distributable profit for the year is positive, we
shall distribute no less than 20% of the distributable profits realized in a given year in the form
of cash dividends each year. Moreover, over any consecutive three-year period, the total cash
dividends distributed shall be no less than 60% of the average annual distributable profits
realized during those three years. Save as prescribed in the Articles of Association, we do not
set other payout ratio target. See “Financial Information — Dividend Policy.”
During the Track Record Period, we have declared dividends. In 2022, 2023 and 2024 and
the six months ended June 30, 2025, we declared and approved the final dividends of
RMB707.5 million, RMB413.6 million, nil and RMB225.6 million, respectively. See note 31
to “Appendix I – Accountants’ Report.”
ACTING-IN-CONCERT UNDERTAKING
InfoGrid Limited was established by independent investors including current and former
employees of the Group and other investors. In order to enhance the actual control of Mr. Zhu
Yiming in the Company to maintain the ownership stability of the Company, in 2013, InfoGrid
Limited issued the Acting-in-Concert Undertaking, as supplemented and confirmed in 2017 and
2019, respectively. See “History and Corporate Structure – Acting-in-Concert Undertaking” for
details.
SUMMARY
–1 6–


--- page 27 ---
LISTING ON THE SHANGHAI STOCK EXCHANGE
Since August 2016, the A Shares of the Company have been listed on the Shanghai Stock
Exchange. The Directors confirm that, during the Track Record Period and up to the Latest
Practicable Date, the Company has complied with all laws and regulations, in all material
respects, applicable to its A-share Listing. To the best knowledge of the Directors, there are no
material matters in relation to the compliance record of the Company on the Shanghai Stock
Exchange that should be brought to the attention of the Stock Exchange or potential investors
of the Global Offering. As advised by the PRC Legal Advisor, during the Track Record Period
and up to the Latest Practicable Date, the Company has not been subject to any material
administrative penalties or regulatory measures imposed by the CSRC, the Shanghai Stock
Exchange or other PRC securities regulatory authorities. Based on the independent due
diligence conducted by the Joint Sponsors and the PRC Legal Advisor’s view above, no
material matter has come to the Joint Sponsors’ attention that would cause them to disagree
with the Directors’ confirmation with regard to the compliance records of the Company on the
Shanghai Stock Exchange.
THE IMPACT OF COVID-19 PANDEMIC
During the outbreak of COVID-19 pandemic, we implemented various preventive
measures, such as enhanced personnel access control and disinfection of the public area.
Although we experienced office closures and some employees worked from home due to the
COVID-19 pandemic, these measures did not have any material adverse impact on our normal
business operations. Moreover, we dynamically adjusted our inventory depending on the
market condition. As such, we did not experience material disruption of supplies caused by the
COVID-19 pandemic. Moreover, as an IC design house, our business and financial results are
closely linked to the cyclical nature of the semiconductor industry, which is influenced by
factors such as macroeconomic trends, capital expenditures, technology shifts, inventory
adjustments, and changes in market demand and supply. During 2021 and 2022, the industry
experienced a global shortage due to, among others, pandemic-related supply disruptions and
unexpected demand surges in consumer electronics, leading to higher selling prices for IC
products. However, as COVID-19 restrictions were lifted and market demand normalized, the
industry entered a downturn in 2023, and the prices of IC products experienced notable
decrease. As a result, our selling prices and net profit declined during this period.
Overall, while the COVID-19 pandemic caused supply chain disruption and presented
challenges globally, it did not cause material disruption of our supply chain nor have material
adverse impact directly on our operation. Save the impact reflected in the industry cycle as
mentioned above, our Directors believe that the COVID-19 pandemic did not have material
adverse impact on our business, results of operations and financial condition.
SUMMARY
–1 7–


--- page 28 ---
RECENT DEVELOPMENT AND NO MATERIAL ADVERSE CHANGE
Recent Development
In the four months ended October 31, 2025, we continued to expand our business against
the backdrop of uneven recovery of the markets. As of the Latest Practicable Date, we had 268
distributors as compared to that of 254 as of June 30, 2025.
Our average selling prices of specialty memory chips decreased from RMB1.45 per unit
in the ten months ended October 31, 2024 to RMB1.41 per unit in the ten months ended
October 31, 2025, MCU decreased from RMB4.19 per unit in the ten months ended October
31, 2024 to RMB3.85 per unit in the ten months ended October 31, 2025, because we took a
more competitive pricing strategy for those products throughout the ten months ended October
31, 2025 to further expand our market shares. During the same periods, our average selling
prices of sensor chips decreased from RMB1.69 per unit to 1.58 per unit, while our analog
chips increased from RMB0.10 per unit to RMB0.16 per unit. Entering November 2025, the
prices and sales volume of our products remained relatively stable as compared to those in
October 2025.
After the Track Record Period and up to the Latest Practicable Date, the Company
subscribed for 947,357 A shares of Maxone Semiconductor (Suzhou) Co., Ltd. ( ੶ɓ̒ኬ᜗(ᘽ
ψ)ʮ̡, 688809.SH, “ Maxone ”) in its initial public offering and listing on the STAR
Market of the Shanghai Stock Exchange at a consideration of approximately RMB81 million,
representing approximately 0.73% of the enlarged share capital of Maxone (the “ Maxone
Investment ”). The fluctuation of the fair value of the Maxone Investment may affect our
results of operations and financial condition. See “Waiver and Exemption — Waiver in Respect
of Investments After the Track Record Period.”
Our Shareholders approved the final dividend for the year ended December 31, 2024 of
RMB0.34 per Share totalled approximately RMB225,575,000 on May 16, 2025, which was
subsequently paid on July 3, 2025.
Unaudited Financial Information for the Nine Months Ended September 30, 2025
We are a public company listed on the Shanghai Stock Exchange and we have disclosed
unaudited key financial information prepared under PRC GAAP as of and for the nine months
ended September 30, 2025 pursuant to the relevant PRC securities laws and regulations. We
have included our unaudited interim condensed consolidated financial information prepared in
accordance with IAS 34, Interim Financial Reporting as of and for the nine months ended
September 30, 2025 in Appendix IA to this Prospectus. Our unaudited interim condensed
consolidated financial information as of and for the nine months ended September 30, 2025 has
been reviewed by our reporting accountant in accordance with Hong Kong Standard on Review
Engagements 2410, Review of Interim Financial Information Performed by the Independent
Auditor of the Entity .
SUMMARY
–1 8–


--- page 29 ---
We recorded revenue of RMB6,831.6 million in the nine months ended September 30,
2025, representing an increase of 20.9% as compared to that of RMB5,649.6 million in the nine
months ended September 30, 2024. Our profit for the period increased by 32.7% from
RMB832.1 million in the nine months ended September 30, 2024 to RMB1,104.4 million in the
nine months ended September 30, 2025.
See “Financial Information — Recent Development and No Material Adverse Change —
Unaudited Financial Information for the Nine Months Ended September 30, 2025”.
No Material Adverse Change
Our Directors confirmed that, as of the date of this prospectus, there has been no material
adverse change in our financial position since June 30, 2025, and there has been no event since
June 30, 2025 that would materially affect the information as set out in the Accountants’ Report
in Appendix I to this prospectus.
SUMMARY
–1 9–


--- page 30 ---
In this prospectus, unless the context otherwise requires, the following terms and
expressions shall have the meanings set out below. Certain other terms are explained in
“Glossary of Technical Terms” in this prospectus.
“2020 Stock Option Incentive
Plan ”
the stock option incentive plan under the 2020 Stock
Option and Restrict Share Incentive Plan of the Company
approved by the Shareholders’ meeting on January 14,
2021
“2021 Restricted Share
Incentive Plan ”
the restricted Share incentive plan under the 2021 Stock
Option and Restrict Share Incentive Plan of the Company
approved by the Shareholders’ meeting on July 26, 2021
“2021 Stock Option Incentive
Plan ”
the stock option incentive plan under the 2021 Stock
Option and Restrict Share Incentive Plan of the Company
approved by the Shareholders’ meeting on July 26, 2021
“2023 Stock Option Incentive
Plan ”
the 2023 Stock Option Incentive Plan of the Company
approved by the Shareholders’ meeting on July 20, 2023
“2024 Stock Option Incentive
Plan ”
the 2024 Stock Option Incentive Plan of the Company
approved by the Shareholders’ meeting on May 14, 2024
“A Share(s) ” ordinary shares issued by the Company, with a nominal
value of RMB1.00 each, which are listed on the Shanghai
Stock Exchange and traded in Renminbi
“Accountants’ Report ” the accountants’ report of the Company, the text of which
is set out in Appendix I to this prospectus
“Acting-in-Concert
Undertaking ”
the undertaking to keep acting-in-concert with Mr. Zhu
Yiming issued by InfoGrid Limited (ʮ
̡), details of which are set out in “History and Corporate
Structure — Acting-in-Concert Undertaking” in this
prospectus
“affiliate(s) ” with respect to any specified person, any other person,
directly or indirectly, controlling or controlled by or
under direct or indirect common control with such
specified person
“AFRC ” Accounting and Financial Reporting Council
DEFINITIONS
–2 0–


--- page 31 ---
“Articles ”o r“ Articles of
Association ”
the articles of association of the Company with effect
upon the Listing Date (as amended from time to time), a
summary of which is set out in Appendix III to this
prospectus
“associate(s) ” has the meaning ascribed thereto under the Listing Rules
“Audit Committee ” the audit committee of the Board
“Board ”o r“ Board of
Directors ”
the board of Directors of the Company
“Business Day ” a day on which banks in Hong Kong are generally open
for normal business to the public and which is not a
Saturday, Sunday or public holiday in Hong Kong
“CAC” Cyberspace Administration of China ( ʕശɛ͏΍ձ਷਷
܃)
“Capital Market
Intermediary(ies) ”o r
“CMI(s) ”
the capital market intermediaries participating in the
Global Offering and has the meaning ascribed thereto
under the Listing Rules
“CCASS ” the Central Clearing and Settlement System established
and operated by HKSCC
“China ”, “ Chinese Mainland ”
or “ the PRC ”
the People’s Republic of China, unless the context
requires otherwise, excluding, for the purposes of this
prospectus only, the regions of Hong Kong, Macau and
Taiwan of the People’s Republic of China
“close associate(s) ” has the meaning ascribed thereto under the Listing Rules
“Companies Ordinance ” the Companies Ordinance (Chapter 622 of the Laws of
Hong Kong), as amended, supplemented or otherwise
modified from time to time
“Companies (Winding Up and
Miscellaneous Provisions)
Ordinance ”o r“ CWUMPO ”
the Companies (Winding Up and Miscellaneous
Provisions) Ordinance (Chapter 32 of the Laws of Hong
Kong), as amended, supplemented or otherwise modified
from time to time
DEFINITIONS
–2 1–


--- page 32 ---
“Company ” GigaDevice Semiconductor Inc. (΅
ʮ̡), a limited liability company established in the
PRC on April 6, 2005 which was converted into a joint
stock company with limited liability on December 28,
2012, formerly known as Beijing GigaDevice
Microelectronic Technology Co., Ltd. (ฆ
ʮ̡), GigaDevice Semiconductor
(Beijing) Co., Ltd. (ʮ̡) and
GigaDevice Semiconductor (Beijing) Inc. (௴อ
ʮ̡)
“Compliance Advisor ” Altus Capital Limited
“connected person(s) ” has the meaning ascribed thereto under the Listing Rules
“connected transaction(s) ” has the meaning ascribed thereto under the Listing Rules
“core connected person(s) ” has the meaning ascribed thereto under the Listing Rules
“CreMemory Technology ” CreMemory Technology Co., Ltd. (ʮ
̡), a limited liability company established in the PRC on
July 31, 2024 and a non-wholly-owned subsidiary of the
Company
“CSRC ” China Securities Regulatory Commission ( ʕ਷ᗇՎ္ຖ
ึ)
“CXMT ” CXMT Corporation (ʮ̡), a
limited liability company established in the PRC on June
13, 2016 which was converted into a joint stock company
with limited liability on June 27, 2023, formerly known
as Hefei Zhiju Integrated Circuit Co., Ltd. (౽ၳණϓ
ʮ̡) and Ruili Integrated Circuit Co., Ltd. ( ြ
ʮ̡)
“CXMT Memory ” CXMT Memory Technologies, Inc. (ʮ
̡), a limited liability company established in the PRC on
November 16, 2017 and a wholly-owned subsidiary of
CXMT
“Director(s) ” the director(s) of the Company
DEFINITIONS
–2 2–


--- page 33 ---
“DLA Piper ” DLA Piper Singapore Pte. Ltd., the legal advisor of the
Company to international export control, sanctions and
tariff laws
“EIT” enterprise income tax
“EIT Law ” the Enterprise Income Tax Law of the People’s Republic
of China ()
“ESG” environmental, social and governance
“Exchange Participant ” a person (a) who, in accordance with the Listing Rules,
may trade on or through the Stock Exchange; and (b)
whose name is entered in a list, register or roll kept by the
Stock Exchange as a person who may trade on or through
the Stock Exchange
“Extreme Conditions ” extreme conditions as announced by the government of
Hong Kong in the case where a super typhoon or other
natural disaster of a substantial scale seriously affect the
working public’s ability to resume work or brings safety
concern for a prolonged period
“FINI ” “Fast Interface for New Issuance,” the online platform
operated by HKSCC that is mandatory for admission to
trading and, where applicable, the collection and
processing of specified information on subscription in
and settlement for the Listing
“Frost & Sullivan ” Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., an
independent market research and consulting company
“General Rules of HKSCC ” General Rules of HKSCC published by the Stock
Exchange and as amended from time to time
“GigaDevice Hefei ” GigaDevice Semiconductor (Hefei) Inc. (ණϓ
ʮ̡), a limited liability company established in
the PRC on March 13, 2014 and a wholly-owned
subsidiary of the Company
“GigaDevice Shanghai ” GigaDevice Semiconductor (Shanghai) Inc. (ཥ
ʮ̡), a limited liability company established in
the PRC on February 16, 2012 and a wholly-owned
subsidiary of the Company
DEFINITIONS
–2 3–


--- page 34 ---
“GigaDevice Xi’an ” GigaDevice Semiconductor (Xi’an) Inc. (τ௴
ʮ̡), a limited liability company
established in the PRC on November 24, 2017 and a
wholly-owned subsidiary of the Company
“Global Offering ” the Hong Kong Public Offering and the International
Offering
“Group ,” “ we,” “ our”o r“ us” the Company and its subsidiaries, or any one of them as
the context may require, and where the context requires,
the businesses operated by the Company and/or its
subsidiaries and their predecessors (if any)
“Guide ”o r“ Guide for New
Listing Applicants ”
the Guide for New Listing Applicants issued by the Stock
Exchange effective from January 1, 2024, as amended,
supplemented or otherwise modified from time to time
“H Share(s) ” listed ordinary share(s) in the share capital of the
Company with a nominal value of RMB1.00 each, which
are to be subscribed for and traded in Hong Kong dollars
and to be listed on the Stock Exchange
“H Share Registrar ” Tricor Investor Services Limited
“Hefei Guojing ” Hefei Guojing V enture Capital Partnership (Limited
Partnership) (਷౺௴ุҳ༟ΥྫΆุ(Υྫ)), a
limited liability partnership established in the PRC on
November 26, 2024 and a shareholder of XySemi
“Hefei Guozheng ” Hefei Guozheng Duoze Industry Investment Partnership
(Limited Partnership) (਷͍εዣପุҳ༟ΥྫΆุ
(Υྫ)), a limited liability partnership established in
the PRC on November 11, 2022 and a shareholder of
XySemi
“Hefei SCVC ” Hefei State-owned Capital V enture Capital Co., Ltd. ( Υ
ʮ̡), a limited liability
company established in the PRC on June 4, 2024
“HK eIPO White Form ” the application for Hong Kong Offer Shares to be issued
in the applicant’s own name, submitted online through
the designated website at www.hkeipo.hk
DEFINITIONS
–2 4–


--- page 35 ---
“HK eIPO White Form Service
Provider ”
the HK eIPO White Form service provider designated
by our Company as specified on the designated website at
www.hkeipo.hk
“HKSCC ” Hong Kong Securities Clearing Company Limited, a
wholly-owned subsidiary of Hong Kong Exchanges and
Clearing Limited
“HKSCC EIPO ” the application for Hong Kong Offer Shares to be issued
in the name of HKSCC Nominees and deposited directly
into CCASS to be credited to your designated HKSCC
Participant’s stock account through causing HKSCC
Nominees to apply on your behalf, including by
instructing your broker or custodian who is a HKSCC
Participant to give electronic application instructions via
HKSCC’s FINI system to apply for Hong Kong Offer
Shares on your behalf
“HKSCC Operational
Procedures ”
the operational procedures of HKSCC, containing the
practices, procedures and administrative or other
requirements relating to HKSCC’s services and the
operation and functions of the CCASS, FINI or any other
platform, facility or system established, operated and/or
otherwise provided by or through HKSCC, as from time
to time in force
“HKSCC Participant ” a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant
“HKSCC Nominees ” HKSCC Nominees Limited, a wholly-owned subsidiary
of HKSCC
“Hong Kong ”o r“ HK” the Hong Kong Special Administrative Region of the
PRC
“Hong Kong dollars ”o r“ HK$” Hong Kong dollars and cents respectively, the lawful
currency of Hong Kong
“Hong Kong Offer Shares ” 2,891,600 H Shares (subject to reallocation as described
in the section headed “Structure of the Global Offering”)
initially offered by the Company for subscription at the
Offer Price pursuant to the Hong Kong Public Offering
DEFINITIONS
–2 5–


--- page 36 ---
“Hong Kong Public Offering ” the offering of the Hong Kong Offer Shares for
subscription by the public in Hong Kong at the Offer
Price (plus brokerage, SFC transaction levy, AFRC
transaction levy and Stock Exchange trading fee), on and
subject to the terms and conditions described in
“Structure of the Global Offering — The Hong Kong
Public Offering”
“Hong Kong Stock Exchange ”
or “ Stock Exchange ”
The Stock Exchange of Hong Kong Limited, a wholly-
owned subsidiary of Hong Kong Exchanges and Clearing
Limited
“Hong Kong Underwriters ” the underwriters of the Hong Kong Public Offering listed
in the section headed “Underwriting — Hong Kong
Underwriters”
“Hong Kong Underwriting
Agreement ”
the underwriting agreement dated December 30, 2025
relating to the Hong Kong Public Offering entered into
by, among others, the Company, the Joint Sponsors, the
Overall Coordinators and the Hong Kong Underwriters,
as further described in the section headed “Underwriting
— Underwriting Arrangements and Expenses — Hong
Kong Public Offering — Hong Kong Underwriting
Agreement”
“IFRS Accounting Standards ” IFRS Accounting Standards as issued by the International
Accounting Standards Board
“Independent Third Party(ies) ” any person(s) or entity(ies) who is not a connected person
of the Company within the meaning of the Listing Rules
“International Offer Shares ” the 26,024,200 H Shares offered by the Company
pursuant to the International Offering (subject to
reallocation as described in the section headed “Structure
of the Global Offering”) together with any additional H
Shares which may be allotted and issued by the Company
pursuant to the exercise of the Offer Size Adjustment
Option and the Over-allotment Option
DEFINITIONS
–2 6–


--- page 37 ---
“International Offering ” the conditional placing of the International Offer Shares
by the International Underwriters at the Offer Price
outside the United States in offshore transactions in
reliance on Regulation S, in each case on and subject to
the terms and conditions of the International
Underwriting Agreement, as further described in the
section headed “Underwriting — Underwriting
Arrangements and Expenses — International Offering”
“International Underwriters ” the group of international underwriters who are expected
to enter into the International Underwriting Agreement to
underwrite the International Offering
“International Underwriting
Agreement ”
the underwriting agreement relating to the International
Offering expected to be entered into on or about January
9, 2026 by the Company and the International
Underwriters, as further described in the section headed
“Underwriting — Underwriting Arrangements and
Expenses — International Offering”
“Joint Bookrunners ” the joint bookrunners as named in the section headed
“Directors and Parties Involved in the Global Offering”
“Joint Global Coordinators ” the joint global coordinators as named in the section
headed “Directors and Parties Involved in the Global
Offering”
“Joint Lead Managers ” the joint lead managers as named in the section headed
“Directors and Parties Involved in the Global Offering”
“Joint Sponsors ” the joint sponsors as named in the section headed
“Directors and Parties Involved in the Global Offering”
“Latest Practicable Date ” December 22, 2025, being the latest practicable date for
the purpose of ascertaining certain information contained
in this prospectus prior to its publication
“Listing ” listing of the H Shares on the Main Board of the Stock
Exchange
DEFINITIONS
–2 7–


--- page 38 ---
“Listing Date ” the date, expected to be on or about Tuesday, January 13,
2026, on which the H Shares are listed and from which
dealings therein are permitted to take place on the Stock
Exchange
“Listing Rules ”o r“ Hong Kong
Listing Rules ”
the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited, as amended,
supplemented or otherwise modified from time to time
“Macau ” the Macau Special Administrative Region of the PRC
“Main Board ” the stock exchange (excluding the option market)
operated by the Stock Exchange which is independent
from and operates in parallel with the GEM of the Stock
Exchange
“MIIT ” Ministry of Industry and Information Technology of the
PRC (ʷ௅)
“MOF” Ministry of Finance of the PRC (௅)
“Nomination Committee ” the nomination committee of the Board
“NPC” the National People’s Congress of the PRC ( ʕശɛ͏΍
ɽึ)
“Offer Price ” the final offer price per Offer Share (exclusive of
brokerage of 1%, SFC transaction levy of 0.0027%, Stock
Exchange trading fee of 0.00565% and AFRC transaction
levy of 0.00015%) at which the Offer Shares are to be
subscribed for and issued pursuant to the Global Offering
as described in the section headed “Structure of the
Global Offering”
“Offer Share(s) ” the Hong Kong Offer Share(s) and the International Offer
Share(s), together with any additional H Shares which
may be allotted and issued pursuant to the exercise of the
Offer Size Adjustment Option and the Over-allotment
Option
DEFINITIONS
–2 8–


--- page 39 ---
“Offer Size
Adjustment Option ”
the option under the International Underwriting
Agreement, exercisable by our Company with prior
written agreement between the Company and the Overall
Coordinators (for themselves and on behalf of the
International Underwriters), pursuant to which the
Company may issue and allot up to an aggregate of
2,891,500 additional H Shares (representing
approximately 10% of the Offer Shares initially offered
under the Global Offering) at the Offer Price to cover
excess demand in the International Offering, without
being subject to any reallocation mechanism
“Overall Coordinators ” the overall coordinators as named in the section headed
“Directors and Parties Involved in the Global Offering”
“Over-allotment Option ” the option granted by the Company to the International
Underwriters, exercisable by the Overall Coordinators
(on behalf of the International Underwriters) pursuant to
the International Underwriting Agreement, to require the
Company to allot and issue up to an aggregate of
4,337,300 additional H Shares (representing in aggregate
approximately 15% of the Offer Shares initially offered
under the Global Offering assuming the Offer Size
Adjustment Option is not exercised at all) or up to
4,771,000 additional H Shares (representing in aggregate
approximately 15% of the Offer Shares being offered
under the Global Offering assuming the Offer Size
Adjustment Option is exercised in full) at the Offer Price,
to cover over-allocations in the International Offering, if
any, exercisable at any time from the date of the
International Underwriting Agreement up to (and
including) the date which is the 30th day from the last
day for lodging of applications under the Hong Kong
Public Offering
“Overseas Listing Trial
Measures ”
The Trial Administrative Measures of Overseas
Securities Offering and Listing by Domestic
Companies ( ྤʫΆุྤ̮೯БᗇՎձɪ̹၍ଣ༊Б፬
) promulgated by the CSRC on February 17, 2023
and became effective on March 31, 2023
“PRC Company Law ” the Company Law of the People’s Republic of
China (), as amended,
supplemented or otherwise modified from time to time
DEFINITIONS
–2 9–


--- page 40 ---
“PRC GAAP ” generally accepted accounting principles of the PRC
“PRC Legal Advisor ” King & Wood Mallesons, the PRC legal advisor to the
Company
“PRC Securities Law ” the Securities Law of the People’s Republic of
China (), as amended,
supplemented or otherwise modified from time to time
“Price Determination Date ” the date, expected to be on or before Friday, January 9,
2026 (Hong Kong time) on which the Offer Price is
determined, or such later time as the Company and the
Overall Coordinators (on behalf of the Underwriters) may
agree, but in any event not later than 12:00 noon on
Friday, January 9, 2026
“Regulation S ” Regulation S under the U.S. Securities Act
“Remuneration and Appraisal
Committee ”
the remuneration and appraisal committee of the Board
“RMB”o r“ Renminbi ” Renminbi, the lawful currency of the PRC
“SAFE ” the State Administration of Foreign Exchange of the PRC
(̮ි၍ଣ҅)
“SAMR ” the State Administration for Market Regulation of the
PRC (̹ఙ္ຖ၍ଣᐼ҅)
“SCNPC ” the Standing Committee of the NPC ( ʕശɛ͏΍ձ਷Ό
ึ)
“Securities and Futures
Commission ”o r“ SFC”
the Securities and Futures Commission of Hong Kong
“SFO” the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, supplemented or
otherwise modified from time to time
“Share(s) ” ordinary share(s) in the capital of the Company with a
nominal value of RMB1.00 each, including A Shares and
H Shares
DEFINITIONS
–3 0–


--- page 41 ---
“Share Incentive Plans ” the 2020 Stock Option Incentive Plan, the 2021 Stock
Option Incentive Plan, the 2021 Restrict Share Incentive
Plan, the 2023 Stock Option Incentive Plan and the 2024
Stock Option Incentive Plan
“Shareholder(s) ” holder(s) of the Share(s)
“Silead ” Silead Inc. (ʮ̡), a limited
liability company established in the PRC on January 27,
2011 and a wholly-owned subsidiary of the Company
“Singapore dollar(s) ”o r“ S$” Singapore dollar, the lawful currency of the Republic of
Singapore
“STA” the State Taxation Administration of the PRC ( ʕശɛ͏
೼ਕᐼ҅)
“Stabilizing Manager ” Huatai Financial Holdings (Hong Kong) Limited
“State Council ” the State Council of the PRC ( ʕശɛ͏΍ձ਷਷ਕ৫)
“Stock Option Incentive Plans ” the 2020 Stock Option Incentive Plan, the 2021 Stock
Option Incentive Plan, the 2023 Stock Option Incentive
Plan and the 2024 Stock Option Incentive Plan
“Stony Creek Capital ” Hefei Stony Creek GigaDevice Chuangzhi V enture
Capital Fund Partnership (Limited Partnership) (ͩ
ΥྫΆุ(Υྫ)), a limited
liability partnership established in the PRC on April 3,
2024 and a shareholder of XySemi
“Stony Creek Capital
Undertaking ”
the undertaking to entrust certain shareholder’s rights in
XySemi to the Company by Stony Creek Capital, details
of which are set out in “History and Corporate Structure
— Acquisition, Merger and Disposal” in this prospectus
“Strategy and Sustainable
Development Committee ”
the strategy and sustainable development committee of
the Board
“subsidiary(ies) ” has the meaning ascribed thereto under the Listing Rules
“substantial shareholder(s) ” has the meaning ascribed thereto under the Listing Rules
DEFINITIONS
–3 1–


--- page 42 ---
“Suzhou Freethink ” Suzhou Freethink Information Technology Co., Ltd. ( ᘽ
ʮ̡), a wholly-owned subsidiary
of the Company that was acquired by the Company in
2019
“Takeovers Code ” the Codes on Takeovers and Mergers and Share Buy-
backs issued by the SFC, as amended, supplemented or
otherwise modified from time to time
“Track Record Period ” the financial years ended December 31, 2022, 2023 and
2024 and the six months ended June 30, 2025
“treasury shares ” has the meaning ascribed thereto under the Hong Kong
Listing Rules
“Underwriters ” the Hong Kong Underwriters and the International
Underwriters
“Underwriting Agreements ” the Hong Kong Underwriting Agreement and/or the
International Underwriting Agreement, as the context
may require
“United States ”o r“ U.S. ” the United States of America, its territories and
possessions, any State of the United States, and the
District of Columbia
“U.S. dollar(s) ”, “ US$”o r
“USD”
United States dollar, the lawful currency of the United
States
“U.S. Securities Act ” the U.S. Securities Act of 1933, as amended,
supplemented or otherwise modified from time to time,
and the rules and regulations promulgated thereunder
“VAT” value-added tax
“XC Memory ” XC Memory Co., Ltd. (ʮ̡), a
limited liability company established in the PRC on July
11, 2024 and a wholly-owned subsidiary of the Company
“XySemi ” Suzhou XySemi Electronic Technology Co., Ltd. ( ᘽψᒄ
ʮ̡), a limited liability company
established in the PRC on February 27, 2009 and a
non-wholly-owned subsidiary of the Company
DEFINITIONS
–3 2–


--- page 43 ---
“XySemi Acting-in-Concert
Agreement ”
the acting-in-concert agreement entered into among the
Company, Hefei SCVC and Hefei Guozheng, details of
which are set out in “History and Corporate Structure —
Acquisition, Merger and Disposal” in this prospectus
“%” per cent
Unless otherwise stated, 603,020 repurchased A Shares which were held as treasury
shares by the Company as of the Latest Practicable Date have been included in the total number
of issued shares of the Company as of the Latest Practicable Date and immediately after
completion of the Global Offering.
DEFINITIONS
–3 3–


--- page 44 ---
“ADC” analog-to-digital converter, a chip that converts an analog
signal, such as a sound picked up by a microphone or
light entering a digital camera, into a digital signal
“ADAS” advanced driver assistance systems, a system that
enhances driving safety and convenience through
advanced vehicle technology
“AEC-Q100” a qualification test sequence for integrated circuits
developed by the Automotive Electronics Council (AEC),
which is designed to ensure the reliability and quality of
ICs used in automotive applications by subjecting them
to a series of stress tests and reliability assessments
“AI” artificial intelligence
“AIPC” AI-powered PC, feature dedicated NPUs for AI
workloads, utilizing a CPU+GPU+NPU architecture and
system-level AI integration to enable on-device large
model inference
“AI Earbuds” smart earphones capable of achieving real-time
translation, noise cancellation optimization, and health
monitoring through voice interaction
“AI Glasses” smart wearable devices capable of realizing real-time
translation, AR navigation, and information reminders
through voice/gesture interaction
“AI Smartphone” smartphones capable of localizing the deployment of
cloud-based large model capabilities, equipped with
high-performance mobile chips that meet AI computing
demands, and integrated with deep learning frameworks
and system-level AI functions
“analog chip” a chip that processes and manipulates continuous, time-
varying electrical signals representing real-world
phenomena
“AMOLED” active matrix organic light emitting diode, a high-quality
display technology known for being brighter, thinner, and
more power-efficient
GLOSSARY OF TECHNICAL TERMS
–3 4–


--- page 45 ---
“AR” augmented reality, a technology that overlays digital
information, such as images, sounds and other data, onto
the real-world environment in real-time, enhancing the
user’s perception and interaction with the surroundings
“ARM
®” advanced RISC machine, a processor architecture based
on the reduced instruction set, with low power
consumption and high energy efficiency as its core goals.
ARM
® represents a registered trademark
“ASIC” application-specific integrated circuit, an integrated
circuit designed for specific purposes and manufactured
for specific user requirements and electronic systems
“ASIL” automotive safety integrity levels, a risk classification
scheme defined in the ISO 26262 standard, which
assesses the potential hazards of automotive systems by
performing a risk analysis based on three factors:
Severity, Exposure, and Controllability
“BIOS” basic input/output system, a basic software system that
initializes hardware and loads the operating system on a
computer
“CAGR” compound annual growth rate
“CPCA” China Passenger Car Association
“CPU” central processing unit, an integrated circuit that serves
as the computational and control core of an electronic
product
“DC-DC” a type of power converter that transforms a source of
direct current (DC) from one voltage level to another
“DDR” double data rate, a type of computer memory technology
that allows for faster data transfer speeds by transferring
data on both the rising and falling edges of the clock
cycle
“DRAM” dynamic random access memory, a type of volatile
memory used in computers and other devices to store data
that is actively being used or processed, requiring
periodic refreshing to maintain the stored information
GLOSSARY OF TECHNICAL TERMS
–3 5–


--- page 46 ---
“edge AI” a technology paradigm that combines the capabilities of
AI with edge computing, deploying AI algorithms and
models directly on edge devices, such as IoT sensors,
smartphones, industrial machines and other local
computing devices
“eMCP” embedded multi-chip package, a chip that combines flash
storage and memory to save space and improve device
performance
“edge computing” a distributed computing model that brings computation
and data storage closer to the sources of data which are
the edge devices such as IoT sensors, smartphones,
industrial machines and other local computing devices
“EV” electric vehicle, a vehicle that is powered entirely or
primarily by electricity, typically using a battery and
electric motor instead of an internal combustion engine
“Flash” a type of non-volatile semiconductor memory chip, which
retains stored information even when powered off,
featuring the ability to be repeatedly read, erased and
written, and is considered a major category of memory
products
“GB” gigabyte, a unit of digital information equal to one billion
bytes
“Gb” gigabit, a unit of digital information equal to one billion
bits
“IA TF” International Automotive Task Force, a coalition of
automotive manufacturers and trade associations
dedicated to establishing global quality standards for the
automotive industry, exemplified by the IA TF 16949
certification
GLOSSARY OF TECHNICAL TERMS
–3 6–


--- page 47 ---
“Integrated Circuit” or “IC” integrated circuit, a type of miniature electronic device or
component, manufactured using semiconductor
techniques, integrating all the necessary transistors,
resistors, capacitors, inductors and their connecting wires
for a circuit onto a small semiconductor wafer (such as a
silicon chip or substrate), which is then soldered and
encapsulated within a casing to form an electronic device
with the desired circuit functions
“ICEV” internal combustion engine vehicle, a vehicle that is
powered by burning fossil fuels such as gasoline or diesel
in an internal combustion engine to generate propulsion
“IDM” integrated device manufacturer(s)
“IMF” International Monetary Fund
“IoT” internet of things, a network of interconnected devices
that communicate and exchange data with each other over
the internet
“IPD” integrated product development, a systematic approach to
product development that emphasizes the concurrent
design of products and their related processes, including
manufacturing and support
“IPTV” Internet protocol television, a system through which
television services are delivered using the Internet
protocol suite over a packet-switched network such as the
Internet, instead of being delivered through traditional
terrestrial, satellite, and cable television formats
“KB” kilobyte, a unit of digital information equal to one
thousand bytes
“Kb” kilobit, a unit of digital information equal to one
thousand bits
“LDO” low-dropout regulator, a type of a DC linear voltage
regulator circuit that can operate even when the supply
voltage is very close to the output voltage
“LPDDR” low power double data rate, a type of synchronous
dynamic random-access memory that consumes less
power than other random access memory designs
GLOSSARY OF TECHNICAL TERMS
–3 7–


--- page 48 ---
“MB” megabyte, a unit of digital information equal to
approximately one million bytes
“Mb” megabit, a unit of digital information equal to
approximately one million bits
“Mbps” megabits per second, a unit of measurement used to
quantify data transfer rates or the speed at which data is
transmitted over a network or communication channel
“MCU” micro control unit(s), a small, self-contained computer on
a single chip, designed to manage specific tasks within an
embedded system
“memory chip” an electronic component that stores data or instructions in
computers and other digital devices
“MR” a technology that blends elements of both virtual reality
and augmented reality, enabling real-time interaction
between physical and virtual objects within a user’s
environment
“NAND Flash” a type of non-volatile Flash memory technology and the
products based on this technology, typically used for data
storage
“NOR Flash” a type of non-volatile Flash memory technology and the
products based on this technology, typically used for data
storage and code storage
“OSA T” outsourced semiconductor assembly and test, critical
stages of the production process of semiconductor
products outsourced to third-party services providers to
handle the assembly, packaging and testing of
semiconductor devices
“OTA” Over-the-air, the wireless delivery of software, firmware,
or configuration updates to electronic devices
“PC” personal computer(s)
“petabytes” a unit of digital information equal to approximately one
million GB
GLOSSARY OF TECHNICAL TERMS
–3 8–


--- page 49 ---
“PMIC” power management integrated circuit, a chip that
manages power usage and battery efficiency in devices
“RISC-V” an open standard instruction set architecture based on
established reduced instruction set computer (RISC)
principles
“R&D” research and development
“SaaS” software-as-a-service, softwares delivered over the
internet as a service on demand
“sensor chip” a small, integrated device that is designed to detect and
measure specific physical or chemical properties in its
environment and convert them into electrical signals
“SLC” single-level cell, a type of Flash memory that stores one
bit of data per cell, offering higher durability and faster
performance compared to multi-level cell (MLC), which
stores two bits per cell, triple-Level Cell (TLC), which
stores three bits per cell, and quad-level cell, which
stores four bits per cell, all of which provide higher
storage density at the cost of reduced speed and
endurance
“SoC” system on chip, an integrated circuit that integrates all or
most components of a computer or other electronic
system into a single chip
“Specialty Memory” typically serves specific application requirements or hold
competitive advantages in particular market segments
“SPI NAND Flash” a type of non-volatile memory that combines the high-
density storage benefits of NAND Flash with the efficient
Serial Peripheral Interface (SPI) for data transfer,
offering a compact and cost-effective solution for
embedded systems and IoT devices
“SPI NOR Flash” a type of non-volatile memory that combines the fast read
speeds and reliable performance of NOR Flash with the
efficient SPI for data communication, offering a compact,
cost-effective, and high-performance solution for
embedded systems and IoT devices
GLOSSARY OF TECHNICAL TERMS
–3 9–


--- page 50 ---
“T-BOX” Telematics Box, an advanced automotive electronic
control unit that enables bidirectional communication
between a vehicle and the outside world
“tRC/tWC” Row cycle time (tRC) and write cycle time (tWC), timing
parameters commonly used in DRAM and NAND Flash
memory specifications
“TWS” true wireless stereo, a type of wireless audio technology
that allows for the creation of a stereo sound system
without any physical wires connecting the audio devices
“USON6” ultra-thin small outline no-lead package with 6 terminals,
a type of surface-mount semiconductor package that is
characterized by its small size and thin profile, making it
suitable for applications where space is a critical
constraint
“VCC” voltage common collector
“VIO” input off set voltage, the differential DC voltage that
must be applied between the two input terminals to force
the output voltage to zero
“VR” virtual reality, a technology that creates a simulated,
immersive environment, allowing users to interact with
and experience a computer-generated world as if it were
real, typically through the use of specialized headsets and
sensors
“XR” extended reality, an umbrella term that encompasses all
forms of immersive technologies, including VR, AR and
MR
“ZB” zettabyte, a unit of digital information equal to 1,000
billion GB
GLOSSARY OF TECHNICAL TERMS
–4 0–


--- page 51 ---
The Company has included in this prospectus forward-looking statements. Statements
that are not historical facts, including but not limited to statements about its intentions, beliefs,
expectations or predictions for the future, are forward-looking statements. When used in this
prospectus, the words “aim”, “anticipate”, “believe”, “could”, “expect”, “going forward”,
“intend”, “ought to”, “project”, “seek”, “should”, “will”, “would”, “vision”, “aspire”, “target”,
“schedule”, and the negative of these words and other similar expressions, as they relate to the
Group or its management, are intended to identify forward-looking statements. Such statements
reflect the current views of the Group’s management with respect to future events, operations,
liquidity and capital resources, some of which may not materialize or may change. These
statements are subject to certain risks, uncertainties and assumptions, including the risk factors
as described in this prospectus, some of which are beyond the Company’s control and may
cause the Company’s actual results, performance or achievements, or industry results, to be
materially different from any future results, performance or achievements expressed or implied
by the forward-looking statements. Y ou are strongly cautioned that reliance on any forward-
looking statements involves known and unknown risks and uncertainties. The risks and
uncertainties facing the Group which could affect the accuracy of forward-looking statements
include, but are not limited to, the following:
 the Group’s operations and business prospects;
 the Group’s ability to maintain relationship with, and the actions and developments
affecting, its customers and suppliers;
 future developments, trends and conditions in the industries and markets in which
the Group operates or plans to operate;
 general economic, political and business conditions in the markets in which the
Group operates;
 changes to the regulatory environment in the industries and markets in which the
Group operates;
 the Group’s ability to maintain its market position;
 the actions and developments of the Group’s competitors;
 the Group’s ability to effectively contain costs and optimize pricing;
 the ability of third parties to perform in accordance with contractual terms and
specifications;
 the Group’s ability to retain senior management and key personnel and recruit
qualified staff;
 the Group’s business strategies and plans to achieve these strategies;
FORW ARD-LOOKING STATEMENTS
–4 1–


--- page 52 ---
 the effectiveness of the Group’s quality control systems;
 change or volatility in interest rates, foreign exchange rates, equity prices, trading
volumes, commodity prices and overall market trends; including those pertaining to
the PRC and the industry and markets in which the Group operates; and
 capital market developments.
By their nature, certain disclosures relating to these and other risks are only estimates and
should one or more of these uncertainties or risks, among others, materialize, actual results
may vary materially from those estimated, anticipated or projected, as well as from historical
results. Specifically but without limitation, sales could decrease, costs could increase, capital
costs could increase, capital investment could be delayed and anticipated improvements in
performance might not be fully realized.
Subject to the requirements of applicable laws, rules and regulations, the Company does
not have any or undertake no obligation to update or otherwise revise the forward-looking
statements in this prospectus, whether as a result of new information, future events or
otherwise. As a result of these and other risks, uncertainties and assumptions, the forward-
looking events and circumstances discussed in this prospectus might not occur in the way the
Company expects or at all. Accordingly, you should not place undue reliance on any
forward-looking information. All forward-looking statements in this prospectus are qualified
by reference to the cautionary statements in this section as well as the risks and uncertainties
discussed in the section headed “Risk Factors” in this prospectus.
In this prospectus, statements of or references to the Company’s intentions or those of its
Directors were made as of the date of this prospectus. Any such information may change in
light of future developments.
FORW ARD-LOOKING STATEMENTS
–4 2–


--- page 53 ---
An investment in the H Shares involves various risks. You should consider carefully
all the information set out in this prospectus and, in particular , the risks described below
before making an investment in the H Shares.
The occurrence of any of the following events could materially and adversely affect
our business, financial position, results of operations or prospects. If any of these events
occurs, the trading price of the H Shares could decline and you may lose all or part of
your investment. This prospectus also contains forward-looking information that involves
risks and uncertainties. Our actual results could differ materially from those anticipated
in these forward-looking statements as a result of many factors, including the risks
described below. You should seek professional advice from your relevant advisors
regarding your prospective investment in the context of your particular circumstances.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
If we fail to properly anticipate or respond to changing market conditions, or develop and
introduce new or enhanced products on a timely basis, our ability to attract and retain
customers could be impaired and our competitive position could be harmed.
The semiconductor industry is subject to constant and rapid changes in technology,
constant product and technology upgrade, frequent new product introductions and evolving
technical standards. New technologies may be introduced that make the current technologies
on which our products are based less competitive or even obsolete or require us to make
changes to our technology that could be expensive and time consuming to implement. The
timing of new product developments, the life-cycle of existing electronics products and the
level of acceptance and growth of new products can also affect demand for our products. Due
to the evolving nature of the markets, our future success depends on our ability to accurately
anticipate and respond to changes in industry standards, technological requirements, customer
and consumer preferences and other market conditions. Our failure to properly anticipate or
respond to changing market conditions could impair our competitive position, and adversely
affect our business, results of operations and financial condition.
In order to compete successfully, we must design, develop, market and sell new or
enhanced products that provide high levels of performance and reliability, offer and integrate
new functionalities and meet the cost expectations of the markets. The intensive competition,
introduction of new and upgraded products and solutions by our competitors, market
acceptance of products based on new or alternative technologies, emergence of new industry
standards, or new trends in consumer preferences could render our existing or future products
obsolete. We may experience difficulties with product design, development, marketing or
certification, which could delay or prevent our development, introduction or marketing of new
or enhanced products. If we fail to introduce new or enhanced products that meet the needs of
our customers or fail to penetrate new markets in a timely manner, the market demand for our
products could be negative affected, and we will lose market share. As a result, the average
selling prices of our products and gross profit margin may decline, and we may record
write-down of inventories due to such decrease in selling prices, which in turn could adversely
affect our business, results of operations and financial condition.
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Our performance is subject to fluctuations in demand from downstream industries that
adopt our products and the prices of the end products.
Our performance is subject to fluctuations in demand from downstream industries that
adopt our products and the prices of the end products. During the Track Record Period, our
products were typically designed for special applications in downstream industries such as
consumer electronics, automobile, industrial applications (for example, industrial automation,
energy storage and battery management), PC and servers, IoT and communications. These
industries are highly competitive and to a large extent driven by end-user markets. From time
to time, these markets may experience downturns, often in connection with, or in anticipation
of, declines in general economic conditions, and we may experience substantial
period-to-period fluctuations in our operating results due to factors affecting these markets.
Fluctuations in demand and price within these industries could lead to reduced sales and
declining prices for the end products, which will in turn affect our revenue and profit margins.
Specifically, many of our customers face intense competition and constant pressure to cut the
selling prices of their end products. Accordingly, many of them may expect ongoing production
cost reductions and increased production efficiencies. If we are not able to meet such
expectations, our prospect, business, results of operations and financial condition will be
adversely affected.
Fluctuation in demand from downstream industries and prices of the end products could
be impacted by many factors beyond our control, including:
 a decline in demand for, or negative perception of, or publicity about, products of
downstream industries;
 a downturn in general economic conditions and consumer spending capabilities that
may affect, among others, the ability and willingness for the market to invest in
those industries, which in turn will negatively affect the downstream demand for our
products;
 regulatory restrictions, trade disputes, industry-specific quotas, tariffs, non-tariff
barriers and taxes that may have the effect of limiting exports from the PRC;
 cyclicality in the downstream industries;
 the inability to dedicate necessary resources to promote and commercialize end
products;
 the failure to meet the evolving industry requirements or achieve market acceptance;
 delays and project cancellations by our end customers; and
 the effects of catastrophic and other disruptive events.
In the event that any of the above events occur, the demand for end products may not
maintain robust growth and the demand or price for our products may be reduced, which in turn
will adversely affect our business, prospects, results of operations and financial condition.
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The markets in which we compete have historically experienced downturns with declines
in average selling prices.
Historically, the markets in which we compete have experienced downturns. These
downturns could be characterized by diminished product demand, production overcapacity,
high inventory levels and decreasing selling prices and inventory values. Economic downturns
often have an adverse effect upon designers, manufacturers and end-users of electronics
products. Downturns in the markets we serve could have a significant negative impact on the
demand for our products. Additionally, due to changing conditions, our customers may in the
future experience periods of excess inventory that could have a significant adverse impact on
our sales. During an industry downturn, there is also a risk that our inventory would decrease
in value. We cannot predict the timing or the severity of the cycles within our industry. In
particular, it is difficult to predict how long and to what levels any industry upturn or downturn,
or general economic strength or weakness, will last or develop.
We have historically experienced the industry downturn from 2023, which resulted in
declines in average selling prices due to supply and demand dynamics, which was in line with
industry trends and adversely affected our business and results of operations. Such downturn
was primarily driven by destocking by downstream participants, following the inventory
buildup in 2021 and 2022 caused by supply shortage then. The downstream destocking
intensified the market competition and, in turn, resulted in a notable decrease in the selling
prices of IC products in 2023. As a result, our revenue decreased from RMB8,130.0 million in
2022 to RMB5,760.8 million in 2023, our gross profit decreased from RMB3,697.2 million in
2022 to RMB1,746.3 million in 2023, and our net profits decreased from RMB2,052.9 million
in 2022 to RMB161.1 million in 2023. See “Financial Information — Significant Factors
Affecting Our Results of Operations — Industry Cycle” and “Financial Information —
Principal Components of Results of Operations.” The average selling prices of our product may
decline due to several factors, including general declines in demand for our products and
excess supply of products as a result of overcapacity. If not accompanied by increases in
demand, supply increases usually result in significant declines in product pricing and, in turn,
declines in the average selling prices and profit margins of our products. Our efforts to increase
sales or to introduce new products to offset the impact of declines in average selling prices may
not be successful.
In the event of a market downturn, competition in the markets in which we operate may
intensify as our customers reduce their purchase orders. Our competitors that are significantly
larger and have greater financial, technical, marketing, distribution, customer support and other
resources or more established market recognition than us may be better positioned to accept
lower prices and withstand adverse economic or market conditions. As such, we may
experience pricing pressure from our competitors and customers. Declines in selling prices
could also affect the valuation of our inventory and result in inventory write-downs. These
declines in average selling prices have in the past had, and may again in the future have, a
material adverse effect on our business, results of operations and financial condition.
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Our R&D efforts are not guaranteed to yield the results we anticipate.
In order to maintain our competitive position and continue to grow our business, we need
to continuously develop and introduce innovative products for our existing and potential
customers. The markets of IC design are characterized by continuous technological
developments and innovation to address increasingly complex and diverse market needs.
Accordingly, we emphasize our R&D activities, which require considerable human resources
and capital investment. In 2022, 2023 and 2024 and the six months ended June 30, 2024 and
2025, our R&D expenses amounted to RMB935.6 million, RMB990.0 million, RMB1,122.4
million, RMB588.3 million and RMB567.7 million, respectively, accounting for 11.5%, 17.2%,
15.3%, 16.3% and 13.7% of our total revenue in the respective years/periods. However, we
cannot assure you that these efforts will be successful or produce our anticipated results.
Even if our research and development efforts are successful, we may not be able to apply
the technologies we developed to introduce new products in time to capture the first-mover
advantage, or at all.
We rely on third parties for IC fabrication, testing and packaging.
As a fabless IC design company, we do not own any IC fabrication, testing or packaging
facilities, and rely on third-party foundry partners to produce ICs. As of the Latest Practicable
Date, we worked closely with 11 quality foundry partners and 26 OSA T partners for IC
packaging and testing. Purchases from our five largest suppliers of each year/period of the
Track Record Period, which were our foundry partners and OSA T partners, amounted to
RMB4,090.6 million, RMB3,081.9 million, RMB3,696.9 million and RMB2,007.8 million in
2022, 2023 and 2024 and the six months ended June 30, 2025, respectively, accounting for
73.4%, 71.0%, 70.2% and 68.9% of our total purchases in the respective years/period. After
consultation with Frost & Sullivan, we are of the view that it is an industry norm for a fabless
IC design house to rely on a limited number of foundry and OSA T partners to ensure
consistency in product quality.
The ability of our foundry partners to provide us with IC is limited by their available
capacity. We typically do not have a guaranteed level of production capacity from our foundry
partners. As a result, if our foundry partners raise their prices or are unable to meet our required
capacity for various reasons, including shortages, or delays in the shipment of semiconductor
equipment or raw materials required to manufacture our IC, or if our business relationships
with our foundry partners deteriorate, we may not be able to obtain the required capacity and
would have to seek alternative foundries, which may not be available on commercially
reasonable terms, or at all.
Moreover, it is possible that other customers of our foundry partners may receive
preferential treatment from our foundry partners in terms of capacity allocation. Reallocation
of capacity by our foundry partners to their other preferred customers could impair our ability
to secure our requisite supply of IC, which could significantly delay the shipment of our
products, causing a loss of revenue and damage to our customer relationships. In addition, if
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we do not accurately forecast our capacity needs, our foundry partners may not have available
capacity to meet our immediate needs or we may be required to pay higher costs to fulfill those
needs, either of which could materially and adversely affect our business, operating results or
financial condition.
Reliance on these third-party production partners presents significant risks to us,
including the following:
 limited control over delivery schedules, quality assurance, manufacturing yields and
production costs;
 potential failure to obtain, or delay in obtaining key process technologies;
 failure by us or our customers to qualify a selected supplier;
 capacity shortages during periods of high demand;
 shortages of materials;
 misappropriation of our IP;
 limited warranties on IC or products supplied to us; and
 potential increases in prices.
The ability and willingness of our production partners to adequately perform is largely
outside our control. If one or more of these production partners fails to perform its obligations
in a timely manner or at satisfactory quality levels, our ability to bring products to market and
our reputation could suffer. For example, in the event that capacity becomes constrained at one
or more production partners, we could face difficulties in fulfilling our customers’ orders and
our revenues could decline. In addition, if these production partners fail to deliver quality
products and components to us on time and at reasonable prices, we could face difficulties in
fulfilling our customers’ orders, our total revenue could decline and our business, financial
condition and results of operations would be adversely affected.
The new scientific and technological outcomes may make our products uncompetitive or
obsolete, and the life-cycle of existing electronics products and the level of acceptance and
growth of new products can affect the market price and demand of our products.
The emergence of new scientific and technological outcomes may cause our products to
become uncompetitive or obsolete. To remain competitive, we must maintain and enhance our
technologies to meet the latest downstream market needs, technological advancement and
industry standards. The development activities related to our technologies may involve
significant time, risks and uncertainties: for instance, our R&D team may not be able to
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coordinate and manage the development projects, the expenses associated with these
investments may affect our margins and operating results and these investments may not
generate sufficient revenue to offset related liabilities and expenses.
Moreover, rapid scientific and technological advancements, combined with the speed at
which customers accept and adopt new products, can significantly shorten the life-cycle of both
our customers’ end products and our own offerings. As new and more advanced products are
introduced to the market, previous generations of products may quickly lose their appeal and
may be obsolete sooner than expected. Under such circumstance, regardless of whether we are
able to respond to these scientific and technological advancements, there would be a risk that
the market price and demand for our existing inventories could be materially and adversely
impacted. Should our products become outdated, we may face difficulties in selling our
inventories at anticipated prices, or may be unable to sell them at all. Those could result in
write-downs or write-off of inventories and decline in our gross profit margin, which in turn
will have a material adverse effect on our business, results of operations and financial
condition.
We face competition and expect to continue facing competition in the future. If we fail to
compete effectively, our business, prospects, results of operations and financial condition
will be materially and adversely affected.
The global semiconductor market in general, and the specialty memory chips, MCU,
analog chips and sensor chips market in particular, are highly competitive. We expect
competition to increase and intensify as other semiconductor companies enter our markets,
many of which may have greater financial and other resources with which to pursue technology
development, product design, manufacturing, marketing and sales and distribution of their
products. Increased competition could result in price pressure, reduced profitability and loss of
market share, any of which could materially and adversely affect our business, prospects,
results of operations and financial condition.
In addition, as opportunities in the semiconductor market grow, we expect that new
entrants will enter these markets and existing competitors, including leading semiconductor
companies, may increase their investments in order to compete more effectively against our
products. These competitors could develop technologies that would render our products or
technologies uncompetitive or obsolete. Our ability to compete successfully depends on factors
both within and outside of our control, including:
 the functionality, performance and pricing of our products relative to those of our
competitors;
 our relationships with our customers and other industry participants;
 our ability to develop new and enhanced products;
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 our ability to retain high-level talents, including our management team and
engineers; and
 the actions of our competitors, including merger and acquisition activity, new
product launches and other actions that could change the competitive landscape.
If our products do not meet our customers’ quality standards, our business and financial
condition may be negatively impacted.
If we are unable to provide products that meet our customers’ demands on a timely basis,
our relationships with our customers will be negatively impacted, and, if we are unable to
repair these relationships by increasing our customers’ confidence in us, we may lose our
customers. Furthermore, our customers conduct quality check and inspection of our products
when they receive them, and they can return or exchange products that do not meet their quality
standards. If we experience a high level of product returns or exchanges, our business and
financial condition may be negatively impacted.
Our patents and other non-patented intellectual properties are valuable assets, and if we
are unable to protect them from infringement, our business prospects may be harmed.
Our success depends in part on our ability to obtain and maintain trade secrets and patent
protection for our technologies, processes and products as well as to successfully enforce our
intellectual property rights and to defend our intellectual properties against third-party
challenges. In the event that our issued patents and patent applications do not adequately
provide coverage for our technologies, processes or products, we would not be able to exclude
others from developing or utilizing these technologies, processes and products. Furthermore,
the degree of future protection of our proprietary rights is uncertain because legal means may
not adequately protect our rights or permit us to gain or keep our competitive advantage.
As our technologies involve unpatented, proprietary technologies, processes, know-how
or data, we primarily rely on trade secret protection and agreements to safeguard our interests.
However, trade secrets are difficult to protect. The persons who may have access to our trade
secrets, including our employees or suppliers, may unintentionally or willfully disclose our
information to competitors. In addition, confidentiality agreements or other agreements
including confidentiality provisions may not be enforceable or provide an adequate remedy in
the event of unauthorized use or disclosure. It may be difficult to prove or enforce a claim that
a third party had illegally obtained and used our trade secrets. In addition, our competitors may
independently develop technologies that are equivalent to our trade secrets, in which case, we
would not be entitled to enforce our trade secrets and our business could be harmed.
We may encounter future litigation by third parties based on claims that our technologies,
processes or products infringe the intellectual property rights of others or that we have
misappropriated the trade secrets of others. We may also initiate lawsuits to defend the
ownership of our inventions and our trade secrets. It is difficult, if not impossible, to predict
how such disputes would be resolved. Litigation relating to intellectual property rights is costly
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and diverts technical and management personnel from their normal responsibilities.
Furthermore, we may not be able to prevail in any such litigation or proceeding. A
determination in an intellectual property litigation or proceeding that results in a finding of
non-infringement by others to our intellectual property or an invalidation of our patents may
result in the use by competitors of our technologies or processes and sale by competitors of
products that resemble our products.
Our business depends on the continuing efforts of our key personnel performing vital
functions.
Our business operations depend on the continuing efforts of our management, particularly
the members of our senior management team. If one or more members of our management are
unable or unwilling to continue their employment with us, we may not be able to replace them
in a timely manner, or at all. We may incur additional expenses to recruit and retain qualified
replacements. In addition, members of our management may join a competitor or form a
competing company. There can be no assurance that we will be able to successfully enforce our
contractual rights included in employment agreements with our management. As a result, our
business may suffer the loss of services of one or more members of our management, which
in turn could have a material and adverse impact on our future prospects, business, results of
operations and financial condition.
Our business is subject to legal, regulatory, political, economic, commercial and other
risks associated with conducting operations in various jurisdictions.
We derive a significant portion of our revenue overseas. Accordingly, we have faced and
continue to face numerous risks, including legal, regulatory, political, economic, commercial
and other risks associated with conducting operations in various jurisdictions, any of which
could negatively affect our financial performance. These risks include the following:
 legal, regulatory, political, economic and commercial instability and uncertainty;
 changes in foreign tax rules, regulations and other requirements, such as changes in
tax rates and statutory and judicial interpretations of tax laws;
 changes in international trade policies and regulations including those in relation to
economic sanctions, export controls and import restrictions, as well in trade barriers
such as imposition of tariffs;
 difficulty in coping with possible conflict of laws resulting from import/export
controls measures of different jurisdictions where we operate;
 changes in foreign country regulatory requirements, including data privacy laws;
 complexities relating to compliance with foreign anti-bribery, anti-corruption and
anti- money laundering regulations and antitrust laws;
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 difficulty in obtaining or enforcing intellectual property rights;
 difficulty in enforcing agreements and collecting overdue receivables through local
legal systems;
 changes in geopolitical situations especially those in jurisdictions where we do
business;
 strict foreign exchange controls and cash repatriation restrictions;
 inflation and/or deflation, and changes in interest rates;
 trade customer insolvency and the inability to collect accounts receivable;
 misconduct by our customers beyond our control, including but not limited to
breaching the agreements with them and laws and regulations of various
jurisdictions that are applicable to them;
 labor disputes and work stoppages at our operations and suppliers; and
 increased costs associated with maintaining the ability to understand local markets
and follow their trends.
In addition, as we operate in many different jurisdictions, we have conducted cross-border
related party transactions in our ordinary course of business, which may result in an increased
likelihood of tax audits, possibly leading to challenges in relation to, amongst other things, tax
residence, permanent establishment and transfer pricing.
We may make acquisitions, establish joint ventures and conduct other strategic
investments, which may not be successful.
To further expand our business and strengthen our market position, we may form strategic
cooperation or make strategic investments and acquisitions to fuel business growth. See
“Business — Our Strategies” and “Future Plans and Use of Proceeds.” Acquisitions involve
numerous risks, including difficulties in integrating the operations and personnel of the
acquired companies, distraction of management from overseeing our existing operations,
difficulties in executing new business initiatives, entering markets or lines of business in which
we have no or limited direct prior experience, the possible loss of key employees and
customers and difficulties in achieving the synergies we anticipated or levels of revenue,
profitability, productivity or other benefits we expected. These transactions may also cause us
to (i) significantly increase our interest expense, leverage and debt service requirements if we
incur additional debt to pay for an acquisition or investment, (ii) issue Shares that would dilute
our current Shareholders’ percentage ownership, or (iii) incur asset write-offs and restructuring
costs and other related expenses. Acquisitions, joint ventures and strategic investments involve
numerous other risks, including potential exposure to unknown liabilities of acquired or
invested companies and restrictions under regulations relating to anti-monopoly. There can be
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no assurance that our acquisitions, joint ventures and other strategic investments will be
successful and will not have a material and adverse impact on our business, results of
operations and financial condition.
We generate a substantial majority of revenue from our distributors during the Track
Record Period, while we may be unable to expand, manage, monitor and coordinate our
sales network effectively.
We had a total of 268 distributors as of the Latest Practicable Date. Our distributor sales
amounted to RMB7,265.3 million, RMB5,214.7 million, RMB6,553.2 million, RMB3,167.7
million and RMB3,751.7 million, accounting for 89.4%, 90.5%, 89.1%, 87.8% and 90.4% of
our total revenue in 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025,
respectively. We face various risks in relation to distributorship, including:
 We have limited control over our distributors, who may not always comply with our
requirements and policies or adhere to agreements with us. This could lead to issues
such as misuse of our logo, violations of our guidelines, or inappropriate marketing
activities, all of which may negatively impact product sales, customer experience
and brand recognition;
 Our distributors may violate our guidelines and sales strategies and compete with
each other for market share;
 Our distributors may fail to sell our products in a timely manner or deviate from our
guidelines and strategies, it could result in price disparities, decreased product sales
and damage to our reputation;
 We may have limited control over the disorganized ordering and stockpiling by
distributors, making it challenging to make sales forecast and manage inventory
levels effectively; and
 Distributors may violate our guidelines and sell our products to unauthorized
channels or regions. This may cause price erosion, brand dilution, conflicts with
authorized distributors, violation of relevant laws and regulations, and disruptions in
pricing strategies across different channels or regions. This can further exacerbate
competition among distributors and undermine our brand recognition.
Occurrence of any of these could have a material and adverse impact on our business,
results of operations and financial condition.
We have established a global sales network comprising distributors and representatives in
over 40 countries or regions. Our ability to maintain and expand our sales network significantly
impacts our success, but this is influenced by various factors, some of which are beyond our
control. For instance, if we encounter challenges in maintaining positive relationships with
existing distributors within our sales channels, experience disputes with them, or struggle to
expand our sales network with new distributors under favorable terms, our market presence
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across different channels or regions may be compromised. Failure to effectively execute our
development and growth strategies, along with providing sufficient resources and operational
support to our sales channels, could have a material and adverse impact on our future
prospects, business, results of operations and financial condition.
Our sales may be influenced by seasonality.
Demand for and sales of our products follow the same seasonality pattern as sales of the
end products that feature our products. We usually experience higher sales volume in the
second and third quarter of a year due to the stock preparation of end customers in response
to the new product launch cycles and increased shopping activities during the holiday season.
Accordingly, various aspects of our operations, including sales, working capital and operating
cash flows, are exposed to the risks associated with seasonal fluctuations in the demand for our
products, and our quarterly or half year results may not reflect our full year results.
Delivery delays, inappropriate handling by third party logistics service providers or
disruptions in the transportation network may adversely affect our business.
We use third party logistics service providers to deliver certain of our work-in-progress
and products. Disputes with or terminations of our contractual relationships with our logistics
service providers could result in delayed delivery of products or increased costs. We may not
be able to continue or extend relationships with our current logistics service providers on terms
acceptable to us or establish relationships with new logistics service providers to ensure
accurate, timely and cost-efficient delivery services. If we are unable to maintain or develop
good relationships with logistics service providers, it may inhibit our ability to offer products
in sufficient quantities, on a timely basis, or at prices acceptable to our customers. If there is
any breakdown in our relationships with our preferred logistics service providers, we may
suffer business interruptions that could materially and adversely affect our business, financial
condition and results of operations. As we do not have any direct control over these logistics
service providers, we cannot guarantee their quality of services. If there is any delay in
delivery, damage to products or any other issue due to transportation shortages, natural
disasters, labour strikes or other factors, we may lose customers and sales and our reputation
may be tarnished. In addition, our suppliers sometimes deliver materials to us through third
party logistics service providers. Delays in delivery could adversely impact our suppliers’
ability to timely deliver materials to us, and our ability to deliver to our customers.
Fluctuations in exchange rates may adversely affect our results of operations.
The value of RMB against the Hong Kong dollar, the U.S. dollar and other currencies
fluctuates, is subject to changes resulting from the PRC government’s policies and depends to
a large extent on domestic and international economic and political developments as well as
supply and demand in the local market. It is difficult to predict how market forces or
government policies may impact the exchange rate between the RMB and the Hong Kong
dollar, the U.S. dollar or other currencies in the future.
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During the Track Record Period, we received the majority of payments in U.S. dollars,
and we expect this to continue for the foreseeable future. As a result, any depreciation of the
U.S. dollar against the RMB may result in exchange losses and negatively impact our operating
results. The proceeds from the Global Offering will be received in Hong Kong dollars and we
expect a substantial portion of which to be spent in RMB. As a result, any appreciation of the
RMB against the Hong Kong dollar may result in the decrease in the value of our proceeds
from the Global Offering. Conversely, any depreciation of the RMB against the Hong Kong
dollars may adversely affect the value of, and any dividends payable on, the Shares in foreign
currency. In addition, there are limited instruments available for us to reduce our foreign
currency risk exposure at reasonable costs. All of these factors could have a material and
adverse impact on our business, results of operations and financial condition.
Failure to maintain optimal inventory levels could increase our inventory holding costs
and cause us to lose sales.
In order to operate our business effectively and meet our consumers’ demands and
expectations, we maintain a certain level of inventory to meet the customer needs and ensure
timely delivery of our products. As of December 31, 2022, 2023 and 2024 and June 30, 2025,
we had inventories of RMB2,153.9 million, RMB1,990.9 million, RMB2,346.4 million and
RMB2,400.6 million, respectively. In 2022, 2023 and 2024 and the six months ended June 30,
2025, our inventory turnover days were 148 days, 188 days, 167 days and 163 days,
respectively. During the Track Record Period, we recorded write-down of inventories due to
the lower estimated realizable value of our inventory than its costs, as a result of the continuous
decrease in market price of our products as affected by the downturn caused by the oversupply
since 2023. We recorded write-down of inventories of RMB177.4 million, RMB236.7 million,
RMB172.1 million and RMB11.6 million in 2022, 2023 and 2024 and six months ended June
30, 2025, respectively. We determine our level of inventory based on historical sales data,
customer order volumes, demand forecasts and supply chain capacity fluctuations. However,
such assessment is inherently uncertain. We cannot assure that we are able to always maintain
optimal inventory levels in the future. If we fail to accurately assess the demand, we may
experience inventory obsolescence and inventory shortage risk. Inventory levels in excess of
demand, or substantial decrease in the expected market price of our products, may result in
inventory write-downs or write-offs and we may sell the excess inventory at discounted prices,
which would have an adverse effect on our profitability. Furthermore, if we underestimate the
demand for our products, we may not be able to have a sufficient number of products to meet
such unanticipated demand, which could result in delays in the delivery of our products and
negatively affect our reputation.
Any of the above may materially and adversely affect our business, results of operations
and financial condition.
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Fair value change of financial assets at fair value through profit or loss may affect our
results of operations.
Our financial assets at fair value through profit or loss primarily consist of structured
deposits and investments in equity securities. As of December 31, 2022, 2023 and 2024 and
June 30, 2025, we had financial assets at fair value through profit or loss of RMB1,937.5
million, RMB1,951.2 million, RMB330.9 million and RMB271.7 million, respectively.
Changes in the fair value of the structured deposits and investments in equity securities are
reflected in our consolidated statements of profit or loss and other comprehensive income. See
note 19 to “Appendix I — Accountants’ Report.” Moreover, after the Track Record Period and
up to the Latest Practicable Date, the Company subscribed for 947,357 A shares of Maxone in
its initial public offering and listing on the STAR Market of the Shanghai Stock Exchange at
a consideration of approximately RMB81 million, representing approximately 0.73% of the
enlarged share capital of Maxone. The fluctuation of the fair value of the Maxone Investment
may affect our results of operations and financial condition. The methodology that we use to
assess these financial assets involves a significant degree of management judgment and is
inherently uncertain. We cannot assure you that market conditions and regulatory environment
will create fair value gains on those financial assets or that we will not incur any fair value
losses on those financial assets in the future. If we incur such fair value losses, our results of
operations and financial condition may be adversely affected.
We may not be able to timely fulfill our obligations in respect of contract liabilities to our
customers or at all.
Our contract liabilities comprise advances received from our customers. We typically
require our customers to pay the consideration for their purchases from us upon or prior to the
delivery of the products. As of December 31, 2022, 2023 and 2024 and June 30, 2025, we had
contract liabilities of RMB82.9 million, RMB88.1 million, RMB94.5 million and RMB135.2
million, respectively. See “Financial Information — Selected Items of Consolidated Statements
of Financial Position — Contract Liabilities.” Our recognition of contract liabilities as revenue
is subject to future performance of contract obligations and may not be representative of
revenue for future periods. As a result of disruption to any of our suppliers, we may fail to
fulfill our contract obligations or meet market demand for our products, and our business,
results of operations, liquidity and financial condition could be adversely affected.
We may incur impairment losses on our intangible assets and goodwill.
Our intangible assets consist of development expenditure, patents and proprietary
technologies and software and others. We recorded intangible assets of RMB460.8 million,
RMB440.9 million, RMB604.2 million and RMB654.6 million as of December 31, 2022, 2023
and 2024 and June 30, 2025, respectively. Goodwill arising on acquisition of businesses is
measured at cost less accumulated impairment losses and is tested annually for impairment.
Our goodwill arose from our acquisitions of Silead, XySemi and Suzhou Freethink. We
recorded goodwill of RMB783.5 million, RMB410.1 million, RMB617.2 million and
RMB617.2 million as of December 31, 2022, 2023 and 2024 and June 30, 2025, respectively.
See notes 2, 14 and 15 to “Appendix I — Accountants’ Report.”
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Goodwill impairment tests are undertaken annually, and the intangible assets impairment
tests are undertaken annually or more frequently if events or changes in circumstances indicate
a potential impairment. During the Track Record Period, we recorded impairment loss on
intangible assets of RMB2.6 million in 2023 and RMB1.9 million in the six months ended June
30, 2025, and impairment loss on goodwill of RMB241.5 million in 2022 and RMB373.4
million in 2023 because Silead would not meet the original expected business results
attributable to the delay in the commercial production of certain customers’ products based on
assessments. The assessment of impairment loss involves a significant degree of management
judgments as well as estimates in determining the key assumptions, and unpredictable adverse
changes in the future may also result in decreases in the value of our intangible assets and
goodwill. Therefore, we cannot assure you that these assumptions and estimates would not
result in outcomes that require a material adjustment to the carrying amounts of these
intangible assets and goodwill in the future, which may in turn result in impairment losses.
Significant impairment losses on intangible assets and goodwill may have a material adverse
effect on our financial condition and results of operations, and may in turn limit our ability to
obtain financing in the future.
Fluctuations in the changes in fair value of equity securities designated at fair value
through other comprehensive income may affect our financial position.
An investment in equity securities other than investments in subsidiaries, associates and
joint ventures that is not held for trading purposes and on initial recognitions we make an
irrevocable election to designate investment at fair value through other comprehensive income
(“FVOCI ”) (non-recycling). Our equity securities designated at FVOCI included the
investment in unlisted equity securities and equity securities listed in the Chinese Mainland.
We recorded equity securities designated at FVOCI of RMB1,533.0 million, RMB1,744.4
million, RMB3,365.9 million and RMB3,491.7 million as of December 31, 2022, 2023 and
2024 and June 30, 2025, respectively. Among it, we recorded investment in unlisted equity
securities of RMB1,514.7 million, RMB1,453.0 million, RMB3,170.6 million and RMB3,417.4
million as of December 31, 2022, 2023 and 2024 and June 30, 2025. The unlisted equity
securities were mainly investments in entities established in Chinese Mainland, primarily
consisted of our investment in CXMT. See notes 2 and 18 to “Appendix I — Accountants’
Report.” As subsequent changes in fair value are recognized in other comprehensive income,
any significant decrease in fair value could result in a significant decrease in our reserves and
net assets.
We may not be successful in our efforts to make acquisitions and successfully integrate
newly acquired assets.
We have in the past pursued and may in the future consider opportunities to acquire assets
that can enhance our overall competitiveness and fuel our sustainable growth. We may be
unable to realize the expected returns for our past acquisitions and investments, and we may
be unable to identify suitable targets, opportunistic or otherwise, for acquisition in the future
at acceptable terms or at all. In addition, exploring acquisition opportunities may divert
management attention from the core business and growth, which could negatively impact our
business, financial condition, results of operations and cash flows. If we identify a suitable
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acquisition candidate, our ability to successfully implement the acquisition will depend on a
variety of factors, including our ability to obtain financing on acceptable terms consistent with
any debt agreements existing at that time and our ability to negotiate acceptable price and
terms.
The success of our past and future acquisitions will be dependent upon our ability to
effectively integrate the acquired assets and operations into our business. Integration can be
complex, expensive and time-consuming. The failure to successfully integrate acquired assets
in a timely and cost-effective manner could adversely affect our business, prospects, results of
operations and financial condition. The diversion of our management’s attention and any
difficulties encountered in any integration process could also have a material adverse effect on
our ability to manage our business. In addition, the integration process could result in the loss
of key employees, the disruption of ongoing businesses, litigation, tax costs or inefficiencies,
or inconsistencies in standards, any of which could adversely affect our ability to maintain the
appeal of our brands and our relationships with customers, employees or other third parties or
our ability to achieve the anticipated benefits or synergies of such acquisitions and could harm
our financial performance.
Additionally, these transactions involve other significant challenges and risks, including
 failure to realize a positive return on our investment;
 difficulties in conducting sufficient and effective due diligence on potential targets,
joint venture partners, and unforeseen or hidden liabilities or additional incidences
of noncompliance, operating losses, costs and expenses that may adversely affect us
following our acquisitions or investments or other strategic transactions;
 actual or potential impairment charges or write-offs of investments in investees,
intangible assets (including intellectual property we acquire) or real properties, and
goodwill recorded in connection with invested businesses, in the event that a decline
in fair value below the carrying value of our investments is other-than-temporary, or
the carrying amount of an asset to which goodwill is allocated exceeds its fair value;
and
 negative impact on our cash and credit profile from loans to or guarantees for the
benefit of the investees.
We may not be able to maintain or enhance our brand recognition.
We believe our brand image has contributed significantly to the success of our business,
and, therefore, maintaining and enhancing the recognition, image and acceptance of our brand
are critical to our ability to differentiate our products from and to compete effectively with our
peers. Our brand image, however, could be jeopardized if we fail to maintain high product
quality, pioneer and keep pace with evolving technology trends, or timely fulfill the orders. If
we fail to promote our brand or to maintain or enhance the brand recognition and awareness
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among our customers, or if we are subject to events or negative allegations affecting our brand
image or publicly perceived position of our brand, our business, operating results and financial
condition could be adversely affected.
We are subject to various risks relating to third-party payment arrangement.
During the Track Record Period, certain of our distributors (individual or collectively, the
“Third-party Payment Customer(s) ”) settled payments with us through accounts belonging
to parties other than the contractual counterparties under the corresponding sales and purchase
agreements (the “ Third-party Payment Arrangement ”). As of the Latest Practicable Date, we
have ceased, or rectified through entering into Tri-party Arrangement Agreement, all
Third-party Payment Arrangement.
In 2022, 2023 and 2024 and six months ended June 30, 2025, the revenue from designated
third parties to us was RMB160.1 million, RMB97.8 million, RMB39.5 million and RMB1.7
million, respectively, representing approximately 1.9%, 1.6%, 0.5% and 0.0% of the total
payments received from all customers, respectively. During the Track Record Period, no
individual Third-party Payment Customer had made material contribution to our revenue. See
“Business — Sales and Marketing — Third-party Payment Arrangement.”
We were subject to various risks relating to such Third-party Payment Arrangement
during the Track Record Period, such as (i) possible claims from third-party payors for return
of funds as they were not contractually indebted to us and possible claims from liquidators of
third-party payors, and (ii) potential money laundering risks as we have limited knowledge
about the source and purpose of the funds utilized by the third-party payors. In the event of any
claims from third-party payors or their liquidators, or legal proceedings (whether civil or
criminal) instituted or brought against us to demand return of the relevant payment or for
violation or noncompliance of laws and regulations, we will have to spend significant financial
and managerial resources to defend against such claims and legal proceedings, and we may be
forced to comply with the court ruling and return the payment for the products that we sold and
services that we provided.
We are subject to risks associated with sanctions and export controls laws and
regulations, international trade policies and actions, and developing domestic and foreign
laws and regulations.
We operate within a global supply chain and our products were sold globally as part of
various end products. As such, we face risks associated with international trade regulations and
geopolitical developments.
Recent trade tensions, such as the ongoing U.S.-China trade dispute, have led to high
tariffs, export controls and other restrictive measures targeting high-technology goods,
semiconductors and electronics. In April 2025, the United States imposed a 20% IEEPA
Fentanyl Tariff and a 125% IEEPA Reciprocal Tariff. In November 2025, the IEEPA Reciprocal
Tariff was suspended, while the 20% IEEPA Fentanyl Tariff remained in effect. However, for
certain consumer electronics produced in China and imported into the United States, the IEEPA
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Fentanly Tariff was reduced to 10%, at least until November 10, 2025. Low value shipments
into the United States through the international postal network valued at $800 or less are
subject to 10% duty. Alternatively, for a period of 6 months from August 29, 2025 (until
February 2026), a specific duty rate of $160 per items is available. Our products were not
subject to the IEEPA Reciprocal Tariff, as it remained suspended, but were subject to the
reduced IEEPA Fentanyl Tariff of 10% as of the Latest Practicable Date. To our best knowledge
and based on the information provided by distributors about the intended locations of their
re-sales of our products, the estimated value of the our products directly sold to, and resold by
distributors to, the United States accounted for less than 1% of the total revenue as well in each
year/period during the Track Record Period. Based on the above, and as advised by the DLA
Piper, our Directors believe that the tariff measures imposed or potentially to be imposed in the
future will have limited impacts on the our business. However, our products could be
incorporated into various types of end-products and be imported into the United States, with
tariff, if any, to be borne by the importing party. Companies who import the products may wish
to pass on the additional tariff on us, their other suppliers or their customers. Even if the tariff
is not passed on to us, the reduced competitiveness of our customers’ end products could lead
to reduction or cancellation of their purchase orders from us.
Moreover, we may be subject to the U.S. export control regime. The Export
Administration Regulation (the “ EAR”) regulates U.S. export control, and the Bureau of
Industry and Security (the “ BIS”) of the Department of Commerce administers the EAR. The
U.S. export control regime regulates the export, transfer or disclosure of U.S. products,
software, and technology to non-U.S. jurisdictions and non-U.S. persons based on the nature
of the product or technology, as well as the destination, transferee, or end-use of a specific
export or transfer.
Non-U.S.-made items may be subject to the U.S. Export Administration Regulations
(EAR) if they meet the criteria outlined in either the Foreign Direct Product Rule or the De
Minimis Rule.
Under the Foreign Direct Product Rule, a non-U.S.-made item will be subject to the EAR
if it is:
 a direct product of certain U.S.-origin software or technology; or
 produced by a plant or a major component of a plant located outside the United
States, where that plant or component is itself a direct product of specified
U.S.-origin software or technology.
The application of Foreign Direct Product Rule to a specific item depends on U.S.
technology and software involved, characteristic of the finished products, intended destination
and end-user or end use of the finished products.
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Under the De Minimis Rule, a non-U.S.-made item will be subject to EAR if it is
physically incorporated or bundled with “controlled” U.S.-origin content in excess of a de
minimis percentage, which is currently 25% for items exported to China. See “Regulatory
Overview — Laws and Regulations Relating to U.S. Export Controls and Sanctions.”
As for our procurement, certain items procured by us, including software (such as EDA)
and hardware (such as storage systems and servers), are US-originated items or non-US-made
items that meet the Foreign Direct Product Rule or De Minimis Rule, and therefore, are subject
to EAR. However, as advised DLA Piper, the items that are subject to EAR do not necessarily
require to obtain U.S. export license for the procurement. For items subject to the EAR,
whether a U.S. export licenses is required depends on (i) the classification (ECCN or EAR-99)
and control reasons, (ii) destination country, and (iii) end-user/end use. As advised by the DLA
Piper, for items procured by us that are subject to EAR, including software and hardware, our
procurement of such items which are subject to EAR would not require a license or would be
subject to a license exemption based on the classifications provided by the suppliers of such
items, because (i) those items are non-sensitive or relatively less sensitive, (ii) China is not an
embargo country as defined by the EAR or subject to comprehensive controls, and (iii) the
Company is not a sanctioned target, and the end use is not restricted. However, there is no
assurance that there will be no requirement for us to obtain license to obtain software or
commodities necessary for our operation in the future. If so, the failure to obtain such license
may adversely affected our business.
Moreover, the BIS maintains lists of individuals and entities subject to enhanced export
control restrictions (the “ Entity List ”). Any export, re-export, or transfer of items subject to
the EAR to the Entity List would requirement a U.S. export license. In recent years, the BIS
has added hundreds of Chinese entities to the Entity List for a variety of reasons, including
foreign policy, defense policy, and security. See “Regulatory Overview – Law and Regulations
Relating to U.S. Export Controls and Sanctions.” As a fabless company in the semiconductor
industry in China, avoiding all transactions with Chinese companies on the Entity List is not
commercially practicable. However, through our internal control and compliance measures set
out below, and as advised by the DLA Piper, our Directors believe that our products sold to
customers on the Entity List are not subject to EAR under (i) the De Minimis Rule as the
“controlled” U. S.-origin content incorporated do not excess 25%, or (ii) under the applicable
Foreign Direct Product Rule as the output, input and end-user/end use requirement are not met,
and therefore our Directors believe that our sales to those customers on the Entity list do not
infringe the EAR.
We conduct necessary compliance measures to fulfill the export control obligations,
including:
 Establish an export control compliance team to conduct all necessary compliance
measures in our routine business;
 Conduct routine screening against our counterparties and assess the applicable
restrictions for dealing with any counterparties;
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 Request our customers to sign the export control compliance commitment;
 Request the suppliers and contract manufacturers to complete the due diligence
questionnaires to confirm whether the items supplied to us and the items used in the
manufacturing process for our products are subject to the EAR;
 Confirm the trade compliance obligations in the contracts with suppliers and
contract manufacturers, to make sure the information provided to us is accurate and
up to date; and
 Engage the compliance team and technical team to review and assess the relevant
export control classifications of our final products.
However, as the BIS rules are evolving, future sanctions and export controls may
significantly impact our business relationships with some of the key customers or suppliers. If
we fail to promptly secure alternative customers or sources of supply on acceptable terms, our
business may be materially and adversely affected. In addition, dealing with customers and
suppliers on the Entity List can also make us vulnerable under the EAR and Entity List
designation, considering the Chinese semiconductor industry is always an enforcement focus
by the U.S. government.
As a fabless IC design house, we use softwares and commodities subject to the EAR,
including certain electronic design automation (“ EDA”) softwares. As the U.S. continued to
impede China’s advanced semiconductor industry, several leading EDA software suppliers in
the U.S. stated that they received notices from BIS to cease supplying EDA software to China
in May 2025. In July 2025, those EDA software suppliers stated that they received notice from
BIS rescinding the restrictions on EDA. However, there is no assurance that those restrictions
will not be re-introduced in the future. We understand that these developments may cause
uncertainties to global supply chains, limited access to key software, and increased production
and compliance costs for companies operating in affected industries. If these trade restrictions
or geopolitical tensions escalate, we may face additional risks, including reduced access to key
software, which could negatively impact our design capabilities.
We are exposed to risks associated with U.S. Executive Order 14105 and its implementing
regulations that prohibit and require notification by on U.S. persons for certain
investments.
On October 28, 2024, the U.S. Department of the Treasury (“ Treasury ”) issued a final
rule, codified in the United States Code of Federal Regulations at 31 C.F.R. part 850, to
implement the Executive Order 14105 of August 9, 2023 (the “ Final Rule ”), which became
effective on January 2, 2025. The Final Rule imposes investment prohibition and notification
requirements on U.S. persons for a wide range of investments in entities associated with China
(including Hong Kong and Macau) that are engaged in activities relating to three sectors: (i)
semiconductors and microelectronics, (ii) quantum information technologies, and (iii) artificial
intelligence systems, collectively defined as “Covered Foreign Persons.” U.S. persons subject
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to the Final Rule are prohibited from making, or required to report, certain investments in
Covered Foreign Persons, which are defined as “Covered Transactions,” and include certain
acquisitions of an equity interest, certain debt financing, joint ventures, and certain investments
as a limited partner in a non-U.S. person pooled investment fund. The Final Rule contains
exceptions for certain investments, including those in publicly traded securities, except when
the U.S. person investor secures rights that go beyond standard minority shareholder
protections. The Final Rule may introduce new hurdles and uncertainties for cross-border
collaborations, investments, and funding opportunities of China-based issuers including us. On
February 21, 2025, U.S. President issued a memo entitled the “America First Investment
Policy” (the “ America First Memo ”), indicating that Executive Order 14105 is under review
and the Trump Administration will consider new or expanded restrictions, such as broadening
the sectors.
As advised by DLA Piper, our Directors believe that we are likely to be deemed a covered
foreign person engaged in one of the “covered activities” (including (i) semiconductors and
microelectronics, (ii) quantum information technologies, and (iii) artificial intelligence
systems) as we design integrated circuits as described in the definition of “notifiable
transactions” in 31 C.F.R. §850.217. We are not directly or indirectly engaged in any “covered
activities” as described in the definition of “prohibited transactions” (each as defined in the
Final Rule) as we do not design, fabricate or package any integrated circuit with performance
parameters of the advanced integrated circuits covered by prohibited transactions as defined by
the Final Rule. However, there is no assurance that the Treasury will take the same view as
ours. As advised by DLA Piper, U.S. persons engaged in a “covered transaction” (as defined
under the Final Rule) that involves the acquisition of our equity interests (including the
subscription of our H Shares in the Global Offering) may need to make a notification to
Treasury pursuant to the Final Rule, which could limit our ability to raise capital or contingent
equity capital from U.S. investors. In addition, even though U.S. persons’ investment of certain
publicly traded securities (such as purchasing our H Share in the open market) falls under an
exception in the Final Rule could still limit our ability to raise capital or contingent equity
capital from U.S. investors after this Global Offering given that the relevant laws, regulations
and policies continue to evolve. In addition, the application and implication of the Final Rule,
the America First Memo and any related policies, laws and regulations are complex, which may
be changed and updated from time to time. Future changes in the Final Rule, the America First
Memo and any related policies, laws and regulations or their interpretations, or any similar or
more expansive restrictions imposed by the U.S. or other jurisdictions, may result in additional
costs on our business and/or limit our ability to raise capital or contingent equity capital from
U.S. investors and other sources that may otherwise be beneficial to us, which could adversely
affect our performance, financial condition and prospects, in which case the Global Offering
of our H Shares may also be materially and adversely affected.
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Our business may be impacted by geopolitical tensions, war, terrorism, public health
issues, natural disasters and other business interruptions.
War, terrorism, geopolitical tensions, public health issues and other business interruptions
could cause damage or disruption to international commerce and the global economy, and thus
could have a material adverse effect on us, our customers and suppliers. Our business
operations are subject to interruption by, among others, natural disasters, whether as a result
of climate change or otherwise, fire, power shortages and other industrial accidents, terrorist
attacks and other hostile acts, labor disputes, public health issues, demonstrations or strikes and
other events beyond our control. Such events could decrease demand for our products, make
it difficult or impossible for us to make and deliver products to our customers, or to receive
materials from our suppliers, and create delays and inefficiencies in our supply chain. In the
event of a natural disaster or major public health issue, we could incur significant losses,
require substantial recovery time and experience significant expenditures in order to resume
operations.
We may from time to time become a party to litigation, arbitration, other legal and
contractual disputes, claims and administrative proceedings.
We may from time to time be subject to various litigation, arbitration, legal or contractual
disputes, claims, or administrative proceedings in the ordinary course of our business,
including, but not limited to, various disputes with or claims from our consumers, suppliers,
customers, business partners and other third parties. Ongoing or threatened litigation,
arbitration, legal or contractual disputes, claims or administrative proceedings may divert our
management’s attention and other resources. Furthermore, any litigation, arbitration, legal or
contractual disputes, claims or administrative proceedings which are initially not of material
importance may escalate and become important to us, due to a variety of factors such as the
subject matter of the disputes, the likelihood of loss, the monetary amount at stake and the
parties involved. If any adverse verdict, judgment or award is rendered against us or if we settle
with any third parties, we may be required to pay significant monetary damages or assume
other liabilities. In addition, negative publicity arising from litigation, legal or contractual
disputes, claims or administrative proceedings may damage our reputation and have a material
and adverse impact on our business, results of operations and financial condition.
There is no assurance that we will not be subject to any litigation, arbitration, other legal
and contractual disputes, claims and administrative proceedings in the future. If any of those
happens, our business, results of operations and financial condition may be materially and
adversely affected.
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We face risks in relation to inability to obtain and maintain the approvals, licenses and
permits required for our operations.
We are required to maintain various approvals, licenses and permits in order to operate
our business. These approvals, licenses and permits are granted upon satisfactory compliance
with, among other things, the applicable laws and regulations. Also, they may be valid only for
a fixed period of time and subject to renewal and accreditation.
We may experience difficulties, delays, or failures in obtaining the necessary approvals,
licenses and permits for our businesses. In addition, there can be no assurance that we will be
able to obtain or renew all of the approvals, licenses and permits required for our existing
business operations in a timely manner, or at all. If we fail to obtain and/or maintain required
approvals, licenses, or permits, our ongoing business could be interrupted, and our expansion
plan may be delayed.
Complying with government regulations may require substantial expenses, and any
non-compliance may expose us to liability. In case of any non-compliance, we may have to
incur significant expenses, and divert substantial management time and resources to resolving
any deficiencies. We may also experience negative publicity arising from such deficiencies,
which could have a material and adverse impact on our business, results of operations and
financial condition.
Any failure or perceived failure to comply with data privacy and security laws could
subject us to potential liabilities.
We collect and store business and transaction data generated during or in connection with
our business operations, including our business and transactions with our customers, suppliers
and business partners. The secure maintenance of such data is critical. We process data in
compliance with the applicable legal requirements to ensure data security. Our operations are
subject to a variety of laws and regulations concerning data privacy and security. Failure to
comply with the increasing number of data protection laws in the PRC, as well as the data
security and privacy laws in other jurisdictions where we operate, could result in significant
reputational damage and adversely affect our business performance. Our efforts to ensure the
compliance with those laws, regulations and standards may not always be sufficient or
effective. Any improper handling of our business and transaction data as a result of any
misconduct by our employees or any information leakage due to external factors, such as
unauthorized access to our database by hackers, could result in non-compliance with relevant
laws and regulations, and in turn result in civil or regulatory liabilities which may subject us
to significant legal, financial and operational consequences. The unauthorized access, loss, or
misuse of data could lead to increased security costs, damage to our reputation, regulatory
proceedings, litigation, fines, investigations, remediation efforts, indemnification
expenditures, and disruptions to our business activities. Such incidents may also result in
additional costs associated with defending against legal claims. Concerns from our customers,
employees, and third parties, even if unfounded, may also have a detrimental impact on our
reputation and operations.
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Failure to comply with the PRC Social Insurance Law and the Regulation on the
Administration of Housing Provident Funds or other PRC labor related regulations may
subject us to fines and other legal or administrative sanctions.
Companies operating in the PRC have to participate in various employee benefit plans
required by the government, including certain social insurance, housing provident funds and
other welfare-oriented payment obligations. The requirement and implementation of employee
benefit plans may vary considering the different levels of economic development in different
locations in the PRC, and the relevant government authorities may examine whether an
employer has made adequate payments of the requisite employee benefit payments, employers
who fail to make adequate payments as required may be subject to late payment fees, fines
and/or other penalties. There is no assurance that our historical and current practice will at all
times be deemed in full compliance with relevant laws and regulations by government
authorities. In the event of any such non-compliance, we may be required to pay any shortfall
in social insurance contributions within a prescribed time period and to pay penalties if we fail
to do so.
During the Track Record Period, we had not made social insurance and housing provident
funds for some of our employees in full in accordance with the relevant PRC laws and
regulations. See “Business — Employees — Social Insurance and Housing Provident Funds.”
According to the applicable laws and regulations, the competent government authorities may
demand us to take rectification measures. If we fail to take the measures as demanded, we may
be subject to fines. See “Regulatory Overview — Regulatory Environment in the PRC —
Regulations on Labour and Employment.” As of the Latest Practicable Date, no competent
governmental authorities had imposed administrative action, fine or penalty to us nor had any
competent governmental authorities required us to settle the outstanding amount of social
insurance payments and housing provident fund contributions. We cannot assure you that we
will not be subject to fines and penalties in relation to our failure to make social insurance and
housing provident fund contributions in full for our employees. Our business, reputation and
results of operations may be adversely affected.
During the Track Record Period, we engaged a third-party human resources agency to pay
social insurance premium and housing provident funds for certain of our employees. Pursuant
to the PRC laws and regulations, we are required to pay social insurance premium and housing
provident funds for our employees under our own accounts instead of making payments under
third-party accounts. The contributions to social insurance premium and housing provident
funds made through third-party accounts may not be viewed as fully compliance, and as a
result, we may be required by competent governmental authorities to pay the outstanding
amounts. Pursuant to the agreements entered into between such a third-party human resources
agency and us, the agency has the obligation to pay social insurance premium and housing
provident funds for our relevant employees. The third-party human resources agency has
confirmed in writing that they have paid such full contributions. During the Track Record
Period and up to the Latest Practicable Date, we had not received any administrative penalty
or labour arbitration application from employees for their agency arrangement with the
third-party human resources agency. In addition, if such human resource agency fails to pay the
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social insurance premium or housing provident funds for and on behalf of our employees in full
as required by applicable PRC laws and regulations, we may also be subject to additional
contributions, late payment fees and/or penalties imposed by the relevant PRC governmental
authorities for failing to discharge our obligations in relation to payment of social insurance
and housing provident funds as an employer or be ordered to rectify. This in turn may adversely
affect our financial condition and results of operations. We cannot assure you that we would
not be required to make additional payments or be subject to penalties or liabilities in relation
to our existing practise.
Furthermore, on July 31, 2025, the PRC Supreme People’s Court promulgated the
Supreme People’s Court’s Interpretation (II) on Several Issues Concerning the Application of
Law in Labor Dispute Cases (༆ᙑ
(ɚ)), (the “New Judicial Interpretation”), which took effect on September 1, 2025.
According to the Article 19(1) of the New Judicial Interpretation, if an employer and an
employee agree or the employee undertakes that social insurance contributions need not to be
paid, the court shall deem such agreement or undertaking invalid. Where an employer fails to
pay social insurance contributions in accordance with the law, and the employee seeks to
terminate the labor contract and claims economic compensation from the employer pursuant to
Article 38(3) of the PRC Labor Contract Law, the court shall support such claims, in which
case, the employer remains liable for paying economic compensation (calculated based on the
number of years of employment multiplied by the monthly salary) to the employee,
notwithstanding any prior agreement to waive social insurance contributions. As advised by
our PRC Legal Adviser, in the absence of material employee complaints, reports or related
lawsuits/arbitrations, the likelihood for us of being subject to centralized collection of
underpaid contributions or significant administrative penalties as a result of the New Judicial
Interpretation is remote. See “Business — Employees — Social Insurance and Housing
Provident Funds.” However, if the relevant PRC authorities hold a different view with us and
determine that we are not in compliance with the New Judicial Interpretation, the financial and
business performance of the Company may be adversely affected.
Our PRC Legal Advisor is of the opinion that, taking into account of the applicable laws
and regulations, recent policies regarding the recovery of social insurance arrears, and the
interpretation the Supreme People’s Court, government-issued credit reports for the Company
and its principal PRC subsidiaries, conformation and undertakings from the Company and
relevant parties etc., provided that there are no significant changes in the current policies,
regulations and local government enforcement and supervision requirements related to social
insurance and housing provident fund, and no major employee complaints, reports or related
lawsuits/arbitrations are filed, we and our major subsidiaries in PRC face a remote risk of being
subject to centralized collection of underpaid contributions or significant administrative
penalties for above issues by the authorities overseeing social insurance and housing provident
fund.
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In addition, as the interpretation and implementation of the Labor Contract Law, the
Social Insurance Law and other labor related regulations are evolving, we cannot assure you
that our employment practice do not and will not violate labor-related laws and regulations in
the PRC, which may subject us to labor disputes or government investigations, we cannot
assure that such risks we may be exposed to will not adversely affect our reputation, business,
results of operations and financial condition or otherwise divert our resources in handling any
lawsuits, legal proceedings or complaints.
Failure to register our lease agreements can result in penalties.
We currently lease several premises in China. Under the PRC laws and regulations, lease
agreements in general are required to be registered with the local land and real estate
administration bureau. The lease agreements for some of our leased properties in China have
not been registered with the relevant PRC government authorities. See “Business — Properties
— Leased Properties.” We may be subject to fines if we fail to rectify such non-compliance
within the prescribed time frame after receiving notice from the relevant PRC government
authorities. The penalty ranges from RMB1,000 to RMB10,000 for each unregistered lease, at
the discretion of the relevant authority. As of the Latest Practicable Date, we had not registered
six lease agreements for our major leased properties. If we receive notice from the relevant
PRC government authorities requiring us to complete the registration within the prescribed
time frame and if we fail to do so, the maximum aggregate amount of potential administrative
penalties we would be subject to for the six lease agreements is RMB60,000. In the event that
any fine is imposed on us for our failure to register our lease agreements, we may not be able
to recover such losses from the lessors.
We have awarded and may continue to award equity instruments under equity incentive
plans, which may cause shareholding dilution to our Shareholders and result in increased
share-based compensations.
We adopted the Share Incentive Plans during the Track Record Period. See “Appendix IV
— Statutory and General Information — Share Incentive Plans.” In 2022, 2023 and 2024 and
the six months ended June 30, 2024 and 2025, we recorded share-based compensations of
RMB203.2 million, RMB97.1 million, RMB159.0 million, RMB64.8 million and RMB84.1
million, respectively. To further incentivize our employees, we may adopt other equity
incentive plans and award additional equity incentives in the future. Issuance of Shares with
respect to our equity incentive plan may dilute the shareholding of our existing Shareholders
and incur substantial share-based compensations that could have a material and adverse impact
on our results of operations.
Our insurance coverage may be insufficient to cover all of our potential losses.
We maintain insurance policies to cover product liabilities, general liabilities and product
recall. In addition, we have purchased a number of property-related insurance policies covering
our facilities, machinery, equipment, inventories and other assets. We cannot assure you that
our insurance will provide adequate coverage for all the risks in connection with our business
RISK FACTORS
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operations. If we were to incur substantial losses and liabilities that are not covered by our
insurance policies, we may be required to bear our losses to the extent that our insurance
coverage is insufficient. As a result, we could suffer significant costs and diversion of our
resources, which could have a material and adverse impact on our business, results of
operations and financial condition.
RISKS RELATING TO THE JURISDICTION IN WHICH WE OPERATE
Changes in economic, political or social conditions or government policies in the markets
in which we operate could have a material adverse effect on our business and results of
operations.
We operate our business in Chinese Mainland and overseas. Accordingly, our business,
financial condition and results of operations may be influenced to a significant degree by
political, economic and social conditions in these markets. Geopolitical, economic and market
conditions, including factors such as the liquidity of the global financial markets, the level and
volatility of debt and equity prices, interest rates, currency and commodities prices, inflation
and the availability and cost of capital and credit have been and will continue to affect the
markets where we operate. In some of these markets, governments continue to play a
significant role in regulating industry development by imposing industrial policies.
Additionally, we are a company incorporated under the PRC laws and a majority of our assets
are located in Chinese Mainland, our financial condition, results of operations and prospects
are subject to economic, political, and legal developments in China. Any changes in the global
or local economy in the markets in which we operate may materially and adversely affect our
business, results of operations and financial condition.
It may be complex to effect service of process upon us or our management or to enforce
against them or us any judgments obtained from foreign courts.
We are a company incorporated under the PRC laws and a majority of our assets are
located in Chinese Mainland. In addition, most of our Directors and senior management reside
in Chinese Mainland. As a result, it may be complex for investors to effect service of process
outside of Chinese Mainland upon us, our Directors or senior management or to enforce
judgments obtained against us in courts outside Chinese Mainland. A judgment of a court of
another jurisdiction may be reciprocally recognized or enforced in Chinese Mainland only if
the jurisdiction has a treaty with Chinese Mainland or if the jurisdiction has been otherwise
deemed by the courts of Chinese Mainland to satisfy the requirements for reciprocal
recognition, subject to the satisfaction of other requirements. However, Chinese Mainland is
not a party to treaties providing for the reciprocal enforcement of judgments of courts with
certain foreign countries such as the United States, and enforcement in Chinese Mainland of
judgments of a court in these jurisdictions may consequently be difficult or impossible. On
January 14, 2019, the Supreme People’s Court and the Department of Justice under the
Government of the Hong Kong Special Administrative Region signed the Arrangement on
Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the
Courts of the Mainland and of the Hong Kong Special Administrative Region (࠰
τર) (the “ 2019 Arrangement ”), which
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became effective on January 29, 2024. The 2019 Arrangement regulates, among others, the
scope and particulars of judgments, the procedures and methods of the application for
recognition or enforcement, the review of the jurisdiction of the court that issued the original
judgment, the circumstances where the recognition and enforcement of a judgment shall be
refused, and the approaches towards remedies for the reciprocal recognition and enforcement
of judgments in civil and commercial matters between the courts in Chinese Mainland and
those in Hong Kong.
We may be subject to additional regulatory requirements under new laws and regulations
on overseas offerings and listings issued by PRC government authorities.
On July 6, 2021, the relevant PRC government authorities issued the Opinions on Strictly
Cracking Down Illegal Securities Activities in Accordance with the Law (੽ᘌ͂Ꮨ
จԈ). These opinions emphasized the need to strengthen the administration
over illegal securities activities and the supervision on overseas listings by China-based
companies and proposed to take effective measures, such as promoting the construction of
relevant regulatory systems to deal with the risks and incidents faced by China-based
overseas-listed companies. See “Regulatory Overview — Regulations on Securities and Filing
for Overseas Listing.”
On February 24, 2023, the CSRC, the MOF, the National Administration of State Secrets
Protection of China, and the National Archives Administration of China published the
Provisions on Strengthening Confidentiality and Archives Administration of Overseas
Securities Offering and Listing by Domestic Companies (̋੶ྤʫΆุྤ̮೯БᗇՎձ
) (the “ Archives Rules ”), which came into effect on
March 31, 2023. The Archives Rules require that, in relation to the overseas securities offering
and listing activities of domestic enterprises, either in direct or indirect form, such domestic
enterprises, as well as securities companies and securities service institutions providing
relevant securities services, are required to strictly comply with relevant requirements on
confidentiality and archives management, establish a sound confidentiality and archives
system, and take necessary measures to implement their confidentiality and archives
management responsibilities. The interpretation and implementation of the Archives Rules may
keep evolving, failure to comply with which may materially affect our business, results of
operations or financial conditions.
We may be subject to the approval, filing or other requirements of the CSRC or other
PRC governmental authorities in connection with future capital raising activities.
We cannot assure you that any new rules or regulations promulgated in the future will not
impose additional requirements or restrictions on us or our financing activities. If it is
determined in the future that approval from or filing with the CSRC or other regulatory
authorities or other procedures are required, we may fail to obtain such approval, perform such
filing procedures or meet such other requirements in a timely manner or at all. We may face
sanctions by the CSRC or other PRC regulatory authorities for failure to seek CSRC approval
or other government authorization, or perform filing procedures, for our future financing
RISK FACTORS
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activities, and these regulatory authorities may impose fines and penalties on us, limit our
operating activities in the PRC, limit our ability to pay dividends outside the PRC, delay or
restrict the repatriation of the proceeds from such future financing activities into the PRC or
take other actions to restrict our financing activities, which could have a material and adverse
effect on our financial conditions and business prospects.
We are subject to the currency exchange regulatory system.
The conversion of Renminbi is subject to applicable laws and regulations in the PRC. It
cannot be guaranteed that under a certain exchange rate, we will have sufficient foreign
exchange to meet our foreign exchange requirements. Under the current PRC foreign exchange
regulatory system, foreign exchange transactions under the current account conducted by us,
including the payment of dividends, do not require advance approval from the SAFE, but we
are required to present documentary evidence of such transactions and conduct such
transactions at designated foreign exchange banks within China that have the licenses to carry
out foreign exchange business.
Under existing foreign exchange regulations, following the completion of the Global
Offering, we will be able to pay dividends in foreign currencies without prior approval from
the SAFE by complying with certain procedural requirements. However, there is no assurance
that these foreign exchange policies regarding payment of dividends in foreign currencies will
continue in the future. In addition, any insufficiency of foreign exchange may restrict our
ability to pay dividends to shareholders or to satisfy any other foreign exchange requirements,
capitalize our capital expenditure plans, and even our results of operations, financial
performance and business prospects may be affected.
The preferential tax treatments granted by the PRC government may become unavailable.
During the Track Record Period, we were subject to certain preferential tax rates. See
“Financial Information — Principal Components of Results of Operations,” and note 7 to
“Appendix I — Accountants’ Report.” We cannot assure you that the PRC policies on
preferential tax treatments will not change or that the current preferential tax treatments we
enjoy or will be entitled to enjoy will not be canceled. Moreover, we cannot assure you that
our PRC subsidiaries will be able to renew the same preferential tax treatments upon
expiration. If any such change, cancelation or discontinuation of preferential tax treatment
occurs, the relevant PRC subsidiary will be subject to the PRC enterprise income tax, at a rate
of 25% on taxable income. As a result, the increase in our tax charge could lead to a material
and adverse impact on our results of operations and financial condition.
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RISKS RELATING TO THE GLOBAL OFFERING
We will be concurrently subject to listing and regulatory requirements of PRC and Hong
Kong.
As we are listed on the Shanghai Stock Exchange and will be listed on the Main Board
in Hong Kong, we will be required to comply with the listing rules (where applicable) and other
regulatory regimes of both jurisdictions, unless an exemption is available or a waiver has been
obtained. Accordingly, we may incur additional costs and resources in continuously complying
with all sets of listing rules in the two jurisdictions.
Our A Shares are listed and traded on the Shanghai Stock Exchange, and the
characteristics of the A share and H share markets may differ.
Our A Shares are listed and traded on the Shanghai Stock Exchange. Following the Global
Offering, our A Shares will continue to be traded on the Shanghai Stock Exchange and our H
Shares will be traded on the Stock Exchange. Under current laws and regulations of PRC,
without the approval from the relevant regulatory authorities, our H Shares and A Shares are
neither interchangeable nor fungible, and there is no trading or settlement between the H Share
and A Share markets. With different trading characteristics, the H Share and A Share markets
have divergent trading volumes, liquidity and investor bases, as well as different levels of retail
and institutional investor participation. As a result, the trading performance of our H Shares
and A Shares may not be comparable. Nonetheless, fluctuations in the price of our A Shares
may adversely affect the price of our H Shares, and vice versa. Due to the different
characteristics of the H Share and A Share markets, the historical prices of our A Shares may
not be indicative of the performance of our H Shares. Y ou should therefore not place undue
reliance on the trading history of our A Shares when evaluating the investment decision in our
H Shares.
There has been no prior public market for our H Shares.
Prior to the completion of the Global Offering, there has been no public market for our
H Shares. There can be no guarantee that an active trading market for our H Shares will
develop or be sustained after the completion of the Global Offering. The Offer Price is the
result of negotiations between our Company and the Overall Coordinators (for themselves and
on behalf of the Underwriters), which may not be indicative of the price at which our Shares
will be traded following the completion of the Global Offering. The market price of our H
Shares may drop below the Offer Price at any time after completion of the Global Offering.
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The trading volume and market price of our H Shares may be volatile, which may result
in substantial losses for investors subscribing for or purchasing our H Shares pursuant to
the Global Offering.
The trading price of our H Shares may be volatile and could fluctuate widely in response
to factors beyond our control. In particular, the performance and fluctuation of the market
prices of other companies with business operations located mainly in Chinese Mainland that
have listed their securities in Hong Kong may affect the volatility in the price of and trading
volumes for our H Shares. A number of Chinese Mainland-based companies have listed their
securities, and some are in the process of preparing for listing their securities, in Hong Kong.
The share price of some of these companies has experienced significant volatility, including
significant price declines after their initial public offerings. The trading performances of the
securities of these companies at the time of or after their offerings may affect the overall
investor sentiment toward Chinese Mainland-based companies listed in Hong Kong and
consequently may impact the trading performance of our Shares. These factors may
significantly affect the market price and volatility of our Shares, regardless of our actual
operating performance.
Future sales or perceived sales of substantial amounts of our Shares in the public market
could negatively affect the price of our Shares and our ability to raise additional capital
in the future.
The market price of our H Shares could decline as a result of future sales of a substantial
number of our Shares or other securities relating to our H Shares in the public market, the
issuance of new shares or other securities, or the perception that such sales or issuances may
occur. Future sales, or perceived sales, of substantial amounts of our securities, including any
future offerings, could also materially and adversely affect our ability to raise capital at a
specific time and on terms favorable to us. Equity-linked securities issued by us may also
confer rights and privileges that take priority over those conferred by the Shares.
Y ou will incur immediate and significant dilution and may face further dilution if we issue
additional Shares in the future.
The Offer Price of the Offer Shares is higher than the net tangible asset value per Share
immediately prior to the Global Offering. Therefore, purchasers of the Offer Shares in the
Global Offering will experience an immediate dilution in pro forma consolidated net tangible
asset value. To expand our business, we may consider offering and issuing additional Shares
in the future. Purchasers of the Offer Shares may experience dilution in the net tangible asset
value per Share of their Shares if we issue additional Shares in the future at a price that is lower
than the net tangible asset value per Share at that time.
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There can be no assurance that we will declare and distribute any amount of dividend in
the future.
We have declared dividends in the past. However, there is no assurance that dividends of
any amount will be declared or distributed by us in any year in the future. Under the applicable
PRC laws, the payment of dividends may be subject to certain limitations. The calculation of
our profit under applicable accounting standards differs in certain respects from the calculation
under IFRS Accounting Standards. As a result, we may not be able to pay a dividend in a given
year even if we were profitable as determined under IFRS Accounting Standards. Our Board
may declare dividends in the future after taking into account our results of operations, financial
condition, cash requirements and availability and other factors as it may deem relevant at such
time. Any declaration and payment as well as the amount of dividends will be subject to our
constitutional documents and the PRC laws and regulations and require approval at our
shareholders’ meeting. No dividend shall be declared or payable except out of our profits and
reserves lawfully available for distribution.
The dividends payable to investors and gains on the sale of our H Shares by our investors
are subject to PRC tax.
Under applicable PRC tax laws, regulations and statutory documents, non-PRC resident
individuals and enterprises are subject to different tax obligations with respect to dividends
received from us or gains realized upon the sale or other disposition of our H Shares. Non-PRC
individuals are generally subject to PRC individual income tax under the Individual Income
Tax Law of the PRC () with respect to PRC source income
or gains at a rate of 20% unless specifically exempted by the tax authority of the State Council
or reduced or eliminated by an applicable tax treaty. We are required to withhold related tax
from dividend payments. Pursuant to applicable regulations, domestic non-foreign-invested
enterprises issuing shares in Hong Kong may generally, when distributing dividends, withhold
individual income tax at the rate of 10%. However, withholding tax on distributions paid by
us to non-PRC individuals may be imposed at other rates pursuant to applicable tax treaties
(and up to 20% if no tax treaty is applicable) if the identity of the individual holder of H shares
and the tax rate applicable thereto are known to us. There is uncertainty as to whether gains
realized upon disposition of H shares by non-PRC individuals are subject to PRC individual
income tax.
Non-PRC resident enterprises that do not have establishments or premises in the PRC, or
that have establishments or premises in the PRC but their income is not related to such
establishments or premises are subject to PRC EIT at the rate of 10% on dividends received
from PRC companies and gains realized upon disposition of equity interests in the PRC
companies pursuant to the EIT Law and other applicable PRC tax regulations and statutory
documents, which may be reduced or eliminated under special arrangements or applicable
treaties between the PRC and the jurisdiction where the non-resident enterprise resides.
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Pursuant to applicable regulations, we intend to withhold tax at a rate of 10% from
dividends paid to non-PRC resident enterprise holders of our H Shares (including HKSCC
Nominees). Non-PRC resident enterprises that are entitled to be taxed at a reduced rate under
an applicable income tax treaty will be required to apply to the PRC tax authorities for a refund
of any amount withheld in excess of the applicable treaty rate, and payment of such refund will
be subject to the PRC tax authorities’ verification. As of the Latest Practicable Date, there were
no specific rules on how to levy tax on gains realized by non-resident enterprise holders of H
shares through the sale or transfer by other means of H shares.
There remains significant uncertainty as to the interpretation and application of the
relevant PRC tax laws by the PRC tax authorities, including whether and how individual
income tax or EIT on gains derived by holders of our H Shares from their disposition of our
H Shares may be collected. If any such tax is collected, the value of our H Shares may be
materially and adversely affected.
Y ou should not place any reliance on any information released by us in connection with
the listing of our A Shares on the Shanghai Stock Exchange.
As our A Shares are listed on the Shanghai Stock Exchange, we have been subject to
periodic reporting and other information disclosure requirements in PRC. As a result, from
time to time, we publicly release information relating to us on the Shanghai Stock Exchange
or other media outlets designated by the CSRC. However, the information announced by us in
connection with the A Shares listing is based on regulatory requirements of the securities
authorities, industry standards and market practices in Chinese Mainland, which are different
from those applicable to the Global Offering. The presentation of financial and operational
information for the Track Record Period disclosed on the Shanghai Stock Exchange or other
media outlets may not be directly comparable to the financial and operational information
contained in this prospectus. As a result, prospective investors in the H Shares should be
reminded that, in making their investment decisions as to whether to purchase the H Shares,
they should rely only on the financial, operating and other information included in this
prospectus. By applying to purchase the H Shares in the Global Offering, you will be deemed
to have agreed that you will not rely on any information other than that contained in this
prospectus and any formal announcements made by us in Hong Kong with respect to the Global
Offering.
Certain statistics contained in this prospectus are derived from official government
sources.
This prospectus, particularly the section headed “Industry Overview,” contains
information and statistics relating to the semiconductor industry in China and internationally.
Certain information and statistics have been derived from various official governments
resources. We believe that the sources of such information are appropriate, and we have taken
reasonable care in extracting and reproducing such information. We have no reason to believe
that such information is false or misleading in any material respect or that any fact has been
omitted that would render such information false or misleading in any material respect. The
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information and statistics from official government sources have not been independently
verified by the Company, the Joint Sponsors, the Overall Coordinators, the Sponsor-OC, the
Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters,
any of our or their respective Directors, executive officers or representatives or any other
person involved in the Global Offering and no representation is given as to their accuracy. Y ou
should therefore not place undue reliance on such information. In addition, we cannot assure
you that such information is stated or compiled on the same basis or with the same degree of
accuracy as or consistent with similar statistics presented elsewhere, and such information may
not be complete or up-to-date. In any event, you should consider carefully the importance
placed on such information or statistics.
Y ou should read the entire prospectus carefully and should not rely on any information
contained in press articles or other media regarding us and the Global Offering.
There have been, prior to the publication of this prospectus, and there may be, subsequent
to the date of this prospectus but prior to the completion of the Global Offering, press and
media coverage regarding us, our business, our industry and the Global Offering. Such press
and media coverage may include references to certain information that does not appear in this
prospectus, including certain operating and financial information and projections, valuations
and other information. None of us, the Joint Sponsors, the Overall Coordinators, the
Sponsor-OC, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers,
the Underwriters or any other person involved in the Global Offering has authorized the
disclosure of any such information in the press or media coverage, or accepts any responsibility
for any such press or media coverage or the accuracy or completeness of any such information
or publication.
Accordingly, prospective investors should not rely on any such information or publication
in making their decision whether to invest in our H Shares. Prospective investors are reminded
that, in making their investment decisions as to whether to purchase our Shares, they should
rely only on the financial, operational, and other information included in this prospectus. By
applying to purchase our H Shares in the Global Offering, you will be deemed to have agreed
that you will not rely on any information other than that contained in this prospectus.
RISK FACTORS
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In preparation of the Global Offering, the Company has sought the following waivers
from strict compliance with the relevant provisions of the Listing Rules and exemption from
the CWUMPO.
W AIVER IN RESPECT OF MANAGEMENT PRESENCE IN HONG KONG
Rules 8.12 and 19A.15 of the Listing Rules provide that a new applicant for listing on the
Stock Exchange must have a sufficient management presence in Hong Kong and, under normal
circumstances, at least two of the new applicant’s executive directors must be ordinarily
resident in Hong Kong. Rule 19A.15 of the Listing Rules further provides that the requirement
in Rule 8.12 of the Listing Rules may be waived by having regard to, among other
considerations, the new applicant’s arrangements for maintaining regular communication with
the Stock Exchange.
The Company’s headquarters are based, and most of the business operations of the Group,
are managed and conducted in the PRC. The executive Directors ordinarily reside in the PRC,
as the Board believes it would be more effective and efficient for the executive Directors to be
based in a location where the Group’s substantial operations are located. As such, the Company
does not and, in the foreseeable future, will not be able to comply with the requirements of
Rules 8.12 and 19A.15 of the Listing Rules for sufficient management presence in Hong Kong.
Accordingly, pursuant to Rule 19A.15 of the Listing Rules, the Company has applied to
the Stock Exchange for, and the Stock Exchange has granted, a waiver from strict compliance
with the requirements under Rules 8.12 and 19A.15 of the Listing Rules, provided that the
Company implements the following arrangements:
(i) the Company has appointed Mr. Hu Hong and Ms. Wong Wai Y ee, Ella (“ Ms.
Wong”) as the authorized representatives of the Company (the “ Authorized
Representatives ”) for the purpose of Rule 3.05 of the Listing Rules. The Authorized
Representatives will serve as the Company’s principal channel of communication
with the Stock Exchange. They can be readily contactable by phone and email to
deal promptly with enquiries from the Stock Exchange and will also be available to
meet with the Stock Exchange to discuss any matters on short notice. The contact
details of the Authorized Representatives have been provided to the Stock
Exchange;
(ii) all the Directors who are not ordinarily resident in Hong Kong possess or can apply
for valid travel documents to visit Hong Kong and can meet with the Stock
Exchange within a reasonable period. In addition, each Director has provided his/her
contact details, including office phone numbers, mobile phone numbers (if any) and
email addresses, to the Authorized Representatives and to the Stock Exchange, so
that each of the Authorized Representatives and the Stock Exchange would be able
to contact all the Directors (including the independent non-executive Directors)
promptly at all times if and when the Stock Exchange wishes to contact the
Directors;
W AIVERS AND EXEMPTION
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(iii) the Company has appointed Altus Capital Limited as its Compliance Advisor for the
period commencing on the Listing Date and ending on the date on which the
Company complies with Rule 13.46 of the Listing Rules in respect of the Company’s
financial results for the first full financial year commencing after the Listing Date,
or until the agreement is terminated, whichever is earlier. The Compliance Advisor
will act as the Company’s additional and alternative channel of communication with
the Stock Exchange, and its representatives will be readily available to answer
enquiries from the Stock Exchange; and
(iv) the Company has appointed designated staff members as the responsible
communication officers at the Company’s headquarters to oversee regular
communication with the Authorized Representatives and the Company’s
professional advisors in Hong Kong, including its legal advisors and the Compliance
Advisor, keep abreast of any correspondence and/or inquiries from the Stock
Exchange and report to the executive Directors, streamlining communication
between the Stock Exchange and the Company following the Listing.
W AIVER IN RESPECT OF JOINT COMPANY SECRETARIES
Pursuant to Rules 3.28 and 8.17 of the Listing Rules, the company secretary must be an
individual who, by virtue of his or her academic or professional qualifications or relevant
experiences, is, in the opinion of the Stock Exchange, capable of discharging the functions of
the company secretary. Pursuant to Note 1 to Rule 3.28 of the Listing Rules, the Stock
Exchange considers the following academic or professional qualifications to be acceptable:
(i) a member of The Hong Kong Chartered Governance Institute;
(ii) a solicitor or barrister (as defined in the Legal Practitioners Ordinance); and
(iii) a certified public accountant (as defined in the Professional Accountants
Ordinance).
Pursuant to Note 2 to Rule 3.28 of the Listing Rules, in assessing “relevant experience,”
the Stock Exchange will consider the individual’s:
(i) length of employment with the issuer and other issuers and the roles he played;
(ii) familiarity with the Listing Rules and other relevant law and regulations including
the SFO, Companies Ordinance, Companies (Winding Up and Miscellaneous
Provisions) Ordinance, and the Takeovers Code;
(iii) relevant training taken and/or to be taken in addition to the minimum requirement
under Rule 3.29 of the Listing Rules; and
(iv) professional qualifications in other jurisdictions.
W AIVERS AND EXEMPTION
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The Company has appointed Ms. Dong Lingyan (“ Ms. Dong ”) as one of the joint
company secretaries. Ms. Dong joined the Group in June 2024. She currently also holds the
position of the Board secretary of the Company. See “Directors and Senior Management” in
this prospectus for further biographical details of Ms. Dong. Although Ms. Dong does not
possess the qualifications set out in Rule 3.28 of the Listing Rules, the Company believes that
it would be in the best interests of the Company and the corporate governance of the Group to
have Ms. Dong as its joint company secretary who is familiar with the Group’s internal
operation and management and possesses professional knowledge and experience in handling
corporate governance and compliance, legal affairs and public relationship related matters. The
Company has also appointed Ms. Wong to act as the other joint company secretary to assist Ms.
Dong in discharging the duties of a company secretary of the Company. Ms. Wong is a
Chartered Secretary, a Chartered Governance Professional and a Fellow of both The Hong
Kong Chartered Governance Institute and The Chartered Governance Institute in the United
Kingdom and is therefore qualified under Rule 3.28 of the Listing Rules to act as a joint
company secretary of the Company. See “Directors and Senior Management” for further
biographical details of Ms. Wong.
Since Ms. Dong does not possess the formal qualifications required of a company
secretary under Rule 3.28 of the Listing Rules, the Company has applied to the Stock Exchange
for, and the Stock Exchange has granted, a waiver from strict compliance with the requirements
under Rules 3.28 and 8.17 of the Listing Rules for a period of three years from the Listing Date
on the following conditions: (i) Ms. Dong must be assisted by Ms. Wong who possesses the
qualifications or experience as required under Rule 3.28 of the Listing Rules and is appointed
as a joint company secretary throughout the waiver period; and (ii) the waiver can be revoked
with immediate effect in the event of a material breach of the Listing Rules by the Company
or Ms. Wong ceases to provide assistance to Ms. Dong during the waivor period.
In support of the waiver application, the Company has adopted, or will adopt the
following arrangements:
(i) in preparation of the application of the Listing, Ms. Dong has attended training on
the respective obligations of the Directors, senior management and the Company
under the relevant Hong Kong laws and the Listing Rules organised by the Hong
Kong legal advisor to the Company;
(ii) Ms. Wong will work closely with Ms. Dong to jointly discharge the duties and
responsibilities as the joint company secretaries and to assist Ms. Dong in acquiring
the relevant experience as required under the Listing Rules for an initial period of
three years from the Listing Date, a period which should be sufficient for Ms. Dong
to acquire the relevant experience as required under the Listing Rules;
(iii) the Company will ensure that Ms. Dong continues to have access to the relevant
training and support in relation to the Listing Rules and the duties required for a
company secretary of an issuer listed on the Stock Exchange. Furthermore, both Ms.
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Dong and Ms. Wong will seek advice from the Company’s Hong Kong legal and
other professional advisors as and when required. Ms. Dong also undertakes to take
no less than 15 hours of relevant professional training in each financial year of the
Company; and
(iv) at the end of the three-year period, the qualifications and experience of Ms. Dong
and the need for on-going assistance of Ms. Wong will be further evaluated by the
Company. The Company will then endeavour to demonstrate to the Stock
Exchange’s satisfaction that Ms. Dong, having had the benefit of the assistance of
Ms. Wong for the immediately preceding three years, has acquired the relevant
experience (within the meaning of Note 2 to Rule 3.28 of the Listing Rules) such
that a further waiver from Rules 3.28 and 8.17 of the Listing Rules will not be
necessary. The Company understands that the Stock Exchange may revoke the
waiver if Ms. Wong ceases to provide assistance to Ms. Dong during the three-year
period.
Prior to the expiry of the three-year period, the Company will demonstrate to the Stock
Exchange that Ms. Dong, having had the benefit of the assistance of Ms. Wong for the
immediately preceding three years, has acquired the relevant experience within the meaning of
Note 2 to Rule 3.28 of the Listing Rules such that a further waiver from Rules 3.28 and 8.17
of the Listing Rules will not be necessary.
W AIVER AND EXEMPTION IN RESPECT OF THE DISCLOSURE REQUIREMENTS
IN RELATION TO THE STOCK OPTION INCENTIVE PLANS
The Listing Rules and the CWUMPO prescribe certain disclosure requirements in relation
to the stock options granted by the Company (the “ ESOP Disclosure Requirements ”):
(i) Rule 17.02(1)(b) of the Listing Rules stipulates that all material terms of a scheme
must be clearly set out in this prospectus. The Company is also required to disclose
in this prospectus full details of all outstanding options and their potential dilution
effect on the shareholdings upon Listing as well as the impact on the earnings per
Share arising from the issue of Shares in respect of such outstanding options;
(ii) Paragraph 27 of Appendix D1A to the Listing Rules requires the Company to set out
in this prospectus particulars of any capital of any member of the Group that is under
option, or agreed conditionally or unconditionally to be put under option, including
the consideration for which the option was or will be granted and the price and
duration of the option, and the name and address of the grantee; and
(iii) Paragraph 10 of Part I of the Third Schedule to the CWUMPO requires the Company
to disclose, amongst others, details of the number, description and amount of any
Shares in or debentures of the Company which any person has, or is entitled to be
given, an option to subscribe for, together with the particulars of the option, that is
to say, (a) the period during which it is exercisable; (b) the price to be paid for
Shares or debentures subscribed for under it; (c) the consideration (if any) given or
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to be given for it or for the right to it; and (d) the names and addresses of the persons
to whom it or the right to it was given or, if given to existing Shareholders or
debenture holders as such, the relevant Shares or debentures must be specified in
this prospectus.
Pursuant to paragraphs 6 to 7 of Chapter 3.6 of the Guide for New Listing Applicants, the
Stock Exchange would normally grant waivers from disclosing the names and addresses of
certain grantees if the issuer could demonstrate that such disclosures would be irrelevant and
unduly burdensome, subject to certain conditions specified therein.
The Company and its subsidiaries may, from time to time, adopt share incentive plans.
For details of the Stock Option Incentive Plans which may involve the issuance of new A
Shares, see section headed “Appendix IV — Statutory and General Information — Share
Incentive Plans.”
As of the Latest Practicable Date, the Company had granted 10,337,809 outstanding
options under the Stock Option Incentive Plans to 968 grantees who are employees of the
Group, including six Directors, members of senior management and other connected persons
of the Company and 962 other employees of the Group, entitling them to subscribe for an
aggregate of 10,337,809 A Shares. As of the Latest Practicable Date, among the outstanding
options, 2,539,200 were held by six Directors, members of senior management and other
connected persons of the Company and 7,798,609 were held by 962 other employees of the
Group. The Shares underlying the granted options represent 1.48% of the total issued share
capital of the Company immediately after completion of the Global Offering (assuming the
Offer Size Adjustment Option and the Over-allotment Option are not exercised and no
additional Shares are issued pursuant to the Share Incentive Plans).
The Company has applied to: (i) the Stock Exchange for a waiver from strict compliance
with the disclosure requirements under Rule 17.02(1)(b) of, and paragraph 27 of Appendix
D1A to, the Listing Rules; and (ii) the SFC for a certificate of exemption under section 342A
of the CWUMPO exempting the Company from strict compliance with paragraph 10(d) of Part
I of the Third Schedule to the CWUMPO, respectively, on the ground that strict compliance
with the above requirements would be unduly burdensome for the Company and the exemption
would not prejudice the interests of the investing public for the following reasons:
(i) given that 962 grantees (who are not Directors, senior management or other
connected persons of the Company) are involved for the grant of outstanding
options, strict compliance with such disclosure requirements in setting out full
details of all the grantees under the Stock Option Incentive Plans in this prospectus
would be costly and unduly burdensome for the Company in light of a significant
increase in cost and timing for information compilation and prospectus preparation.
For example, the Company would need to collect and verify the addresses of a large
number of grantees to meet the disclosure requirement;
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(ii) the grant and exercise in full of the options under the Stock Option Incentive Plans
will not cause any material adverse impact to the financial position of the Group.
The 962 grantees who are not Directors, senior management or other connected
persons of the Company have been granted options entitling them to subscribe for
an aggregate of 7,798,609 A Shares, representing 1.12% of the total issued share
capital of the Company immediately after completion of the Global Offering
(assuming the Offer Size Adjustment Option and the Over-allotment Option are not
exercised and no additional Shares are issued pursuant to the Share Incentive Plans),
which is not material in the circumstances of the Company;
(iii) there will not be any new H Shares issued under the Stock Option Incentive Plans
as such Stock Option Incentive Plans are A-share incentive schemes;
(iv) non-compliance with the above disclosure requirements would not prevent the
Company from providing its potential investors with an informed assessment of the
activities, assets, liabilities, financial position, management and prospects of the
Company; and
(v) material information relating to the A Shares under the Stock Option Incentive Plans
has been disclosed in the section headed “Appendix IV — Statutory and General
Information — Share Incentive Plans” in this prospectus to provide prospective
investors with sufficient information to make an informed assessment of the
potential dilutive effect and impact on earnings per Share of the options in making
their investment decision, and such information includes:
(a) a summary of the latest terms of the Stock Option Incentive Plans;
(b) the aggregate number of Shares subject to the options and the percentage in the
total issued share capital of the Company of which such number represents;
(c) the dilutive effect and the impact on earnings per Share upon full exercise of
the options immediately following completion of the Global Offering
(assuming the Offer Size Adjustment Option and the Over-allotment Option are
not exercised);
(d) full details of the options granted by the Company to Directors, senior
management and other connected persons of the Company, as well as other
grantees who have been granted options to subscribe for an aggregate number
of 89,520 or more A Shares, on an individual basis, are disclosed in this
prospectus, and such details include all the particulars required under Rule
17.02(1)(b) of the Listing Rules, paragraph 27 of Appendix D1A to the Listing
Rules and paragraph 10 of Part I of the Third Schedule to the CWUMPO;
(e) with respect to the options granted to other grantees (other than those referred
to in (d) above), disclosure are made on an aggregate basis, categorized into
lots based on the number of A Shares underlying each individual grantee, being
(i) less than 5,001 A Shares, (ii) 5,001 to 10,000 A Shares, (iii) 10,001 to
20,000 A Shares, (iv) 20,001 to 30,000 A Shares and (v) 30,001 to 89,519 A
Shares. For each lot of A Shares, the following details are disclosed in this
prospectus, including (1) the aggregate number of grantees and the number of
Shares subject to the options; (2) the consideration (if any) paid for the grant
of the options; and (3) the exercise period of the options and the exercise price
for the options; and
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(f) the particulars of the waiver and exemption granted by the Stock Exchange and
the SFC, respectively.
The Company has applied for, and the Stock Exchange has granted, a waiver from strict
compliance with the applicable ESOP Disclosure Requirements on the conditions that:
(i) on an individual basis, full details of the options under the Stock Option Incentive
Plans granted by the Company to each of the Directors, members of senior
management and other connected persons of the Company, as well as other grantees
who have been granted options to subscribe for an aggregate number of 89,520 or
more A Shares, will be disclosed in the section headed “Appendix IV — Statutory
and General Information — Share Incentive Plans” as required under Rule
17.02(1)(b) of, and paragraph 27 of Appendix D1A to, the Listing Rules, and
paragraph 10 of Part I of the Third Schedule to the CWUMPO;
(ii) in respect of the options under the Stock Option Incentive Plans granted to grantees
other than those referred to in sub-paragraph (i) above, disclosure will be made, on
an aggregate basis, categorized into lots based on the number of A Shares underlying
each individual grantee, being (i) less than 5,001 A Shares, (ii) 5,001 to 10,000 A
Shares, (iii) 10,001 to 20,000 A Shares, (iv) 20,001 to 30,000 A Shares and (v)
30,001 to 89,519 A Shares. For each lot of A Shares, the following details are
disclosed in this prospectus, including (1) the aggregate number of grantees and the
number of Shares subject to the options; (2) the consideration (if any) paid for the
grant of the options; and (3) the exercise period of the options and the exercise price
for the options;
(iii) aggregate number of Shares underlying the options granted under the Stock Option
Incentive Plans and the percentage to the total issued share capital of the Company
represented by such number of Shares as of the Latest Practicable Date;
(iv) the dilutive effect and impact on earnings per Share upon the full exercise of the
options under the Stock Option Incentive Plans will be disclosed in the section
headed “Appendix IV — Statutory and General Information — Share Incentive
Plans”;
(v) a summary of the major terms of the Stock Option Incentive Plans will be disclosed
in the section headed “Appendix IV — Statutory and General Information — Share
Incentive Plans”;
(vi) full lists of all the grantees who have been granted options to subscribe for A Shares
under the Stock Option Incentive Plans containing all the particulars as required
under Rule 17.02(1)(b) of, and paragraph 27 of Appendix D1A to, the Listing Rules
be made available for public inspection in accordance with “Documents Delivered
to the Registrar of Companies and Available on Display — Documents Available for
Inspection” in Appendix V;
(vii) the grant of a certificate of exemption under the CWUMPO from the SFC exempting
the Company from strict compliance with paragraph 10(d) of Part I of the Third
Schedule to the CWUMPO; and
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(viii) the particulars of the waiver will be disclosed in this prospectus.
The Company has applied for, and the SFC has granted, a certificate of exemption under
section 342A of the CWUMPO from strict compliance with paragraph 10(d) of Part I of the
Third Schedule to the CWUMPO on the conditions that:
(i) on an individual basis, full details of the options under the Stock Option Incentive
Plans granted by the Company to each of the Directors, members of senior
management and other connected persons of the Company, as well as other grantees
who have been granted options to subscribe for an aggregate number of 89,520 or
more A Shares, will be disclosed in the section headed “Appendix IV — Statutory
and General Information — Share Incentive Plans” as required under paragraph 10
of Part I of the Third Schedule to the CWUMPO;
(ii) in respect of the options under the Stock Option Incentive Plans granted to grantees
other than those referred to in sub-paragraph (i) above, disclosure will be made, on
an aggregate basis, categorized into lots based on the number of A Shares underlying
each individual grantee, being (i) less than 5,001 A Shares, (ii) 5,001 to 10,000 A
Shares, (iii) 10,001 to 20,000 A Shares, (iv) 20,001 to 30,000 A Shares and (v)
30,001 to 89,519 A Shares. For each lot of A Shares, the following details are
disclosed in this prospectus, including (1) the aggregate number of grantees and the
number of Shares subject to the options; (2) the consideration (if any) paid for the
grant of the options; and (3) the exercise period of the options and the exercise price
for the options;
(iii) full lists of all the grantees who have been granted options to subscribe for A Shares
under the Stock Option Incentive Plans containing all the particulars as required
under paragraph 10 of Part I of the Third Schedule to the CWUMPO be made
available for public inspection in accordance with “Documents Delivered to the
Registrar of Companies and Available on Display — Documents Available for
Inspection” in Appendix V; and
(iv) the particulars of the exemption will be disclosed in this prospectus which will be
issued on or before Wednesday, December 31, 2025.
W AIVER IN RESPECT OF ALLOCATION OF H SHARES TO EXISTING MINORITY
SHAREHOLDERS AND THEIR CLOSE ASSOCIATES
Rule 10.04 of the Listing Rules requires that a person who is an existing shareholder of
the issuer may only subscribe for or purchase any securities for which listing is sought which
are being marketed by or on behalf of the issuer either in his or its own name or through
nominees if the conditions in Rules 10.03(1) and (2) of the Listing Rules are fulfilled. It is
provided in Rule 10.03(1) of the Listing Rules that no securities may be offered to existing
shareholders on a preferential basis and no preferential treatment may be given to them in the
allocation of the securities; and in Rule 10.03(2) that the minimum prescribed percentage of
public shareholders required by Rule 8.08(1) must be achieved.
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Paragraph 1C(2) of Appendix F1 to the Listing Rules provides that no allocations will be
permitted to the existing shareholders of the applicant or their close associates, whether in their
own names or through nominees, in the Global Offering unless the conditions set out in Rules
10.03 and 10.04 of the Listing Rules are fulfilled. Chapter 4.15 of the Guide for New Listing
Applicants provides that the Stock Exchange will consider giving consent and granting waiver
from Rule 10.04 of the Listing Rules to an applicant’s existing shareholders or their close
associates to participate in an initial public offering if any actual or perceived preferential
treatment arising from their ability to influence the applicant during the allocation process can
be addressed.
Prior to the Listing, the Company’s share capital comprises entirely A Shares listed on the
Shanghai Stock Exchange. The Company has a large and widely dispersed public A Share
shareholder base.
The Company has applied to the Stock Exchange for, and the Stock Exchange has granted,
a waiver from strict compliance with the requirements under Rule 10.04 and consent under
Paragraph 1C of Appendix F1 to the Listing Rules to permit H Shares in the International
Offering to be placed to certain existing minority Shareholders who (i) hold less than 5% of
the total number of A Shares in issue of the Company prior to the completion of the Global
Offering and (ii) are not and will not become (upon the completion of the Global Offering) core
connected persons of the Company or the close associates of any such core connected person
(together, the “ Existing Minority Shareholders ”), subject to the conditions as follows:
(a) the Joint Sponsors confirm that each Existing Minority Shareholder to whom the
Company may allocate the H Shares in the International Offering holds less than 5%
of the total number of A Shares in issue of the Company before Listing;
(b) the Joint Sponsors confirm that each Existing Minority Shareholder is not, and will
not be, a core connected person of the Company or any close associate of any such
core connected person immediately prior to or following the Global Offering;
(c) the Joint Sponsors confirm that none of the Existing Minority Shareholders have the
right to appoint a Director and/or have any other special rights;
(d) the Joint Sponsors confirm that allocation to the Existing Minority Shareholders or
their close associates will not affect the Company’s ability to satisfy the public float
requirement as prescribed by the Stock Exchange under Rule 8.08 (as replaced by
19A.13A(2)(b)) of the Listing Rules or otherwise approved by the Stock Exchange;
(e) the Joint Sponsors confirm to the Stock Exchange in writing that based on (a) their
discussions with the Company and the Overall Coordinators; and (b) the
confirmations provided to the Stock Exchange by the Company and the Overall
Coordinators (confirmations (f) and (g) mentioned below), and to the best of their
knowledge and belief, they have no reason to believe that any of the Existing
Minority Shareholders or their close associates received any preferential treatment,
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or is in a position to exert influence on the Company to obtain actual or perceived
preferential treatment in the allocation either as a cornerstone investor or as a placee
by virtue of their relationship with the Company other than the preferential
treatment of assured entitlement under a cornerstone investment following the
principles set out in Chapter 4.15 of the Guide for New Listing Applicants, and
details of the allocation to the Existing Minority Shareholders who participate as
cornerstone investors or placees holding more than 1% of the issued share capital of
the Company immediately prior to the completion of the Global Offering will be
disclosed in this prospectus and/or the allotment results announcement, as the case
may be;
(f) the Company will confirm to the Stock Exchange in writing that:
(i) in the case of participation as cornerstone investors, no preferential treatment
has been, nor will be, given to the Existing Minority Shareholders or their
close associates by virtue of their relationship with the Company, other than
the preferential treatment of assured entitlement under a cornerstone
investment following the principles set out in Chapter 4.15 of the Guide for
New Listing Applicants, nor is the Existing Minority Shareholder in a position
to exert influence on the Company to obtain actual or perceived preferential
treatment, and the Existing Minority Shareholders or their close associates’
cornerstone investment agreements do not contain any material terms which
are more favorable to the Existing Minority Shareholders or their close
associates than those in other cornerstone investment agreements; or
(ii) in the case of participation as placees, no preferential treatment has been, nor
will be, given to the Existing Minority Shareholders or their close associates,
nor is the Existing Minority Shareholder in a position to exert influence on the
Company to obtain actual or perceived preferential treatment, by virtue of their
relationship with the Company in any allocation in the placing tranche;
(g) in the case of participation as placees, the Overall Coordinators will confirm to the
Stock Exchange that, to the best of their knowledge and belief, no preferential
treatment has been, nor will be, given to the Existing Minority Shareholders or their
close associates by virtue of their relationship with the Company in any allocation
in the placing tranche.
W AIVER IN RESPECT OF INVESTMENTS AFTER THE TRACK RECORD PERIOD
Pursuant to Rules 4.04(2) and 4.04(4)(a) of the Listing Rules, the accountants’ report to
be included in a listing document must include the income statements and balance sheets of any
subsidiary or business acquired, agreed to be acquired or proposed to be acquired since the date
to which its latest audited accounts have been made up in respect of each of the three financial
years immediately preceding the issue of the listing document.
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Pursuant to Rule 4.02A of the Listing Rules, acquisitions of business include acquisitions
of associates and any equity interest in another company. Pursuant to Note 4 to Rule 4.04 of
the Listing Rules, the Stock Exchange may consider granting a waiver of the requirements
under Rules 4.04(2) and 4.04(4) on a case-by-case basis, and having regard to all relevant facts
and circumstances and subject to certain conditions set out thereunder.
After the Track Record Period and up to the Latest Practicable Date, the Company
subscribed for 947,357 A shares of Maxone Semiconductor (Suzhou) Co., Ltd. ( ੶ɓ̒ኬ᜗(ᘽ
ψ)ʮ̡, 688809.SH, “ Maxone ”) in its initial public offering and listing on the STAR
Market of the Shanghai Stock Exchange at a consideration of approximately RMB81 million,
representing approximately 0.73% of the enlarged share capital of Maxone (the “ Maxone
Investment ”).
Maxone is principally engaged in research, development, design, production and sale of
probe cards, which is one of the core hardware for wafer testing. According to the public
available financial information of Maxone prepared in accordance with the PRC GAAP , the
profit before tax of Maxone amounted to approximately RMB18.2 million and RMB258.6
million for the years ended December 31, 2023 and 2024, respectively, and the net profits of
Maxone amounted to approximately RMB18.7 million and RMB233.1 million for the years
ended December 31, 2023 and 2024, respectively. To the best knowledge, information and
belief of the Directors and having made all reasonable enquiry, each of Maxone and its ultimate
beneficial owner is an Independent Third Party.
The Company believes that the Maxone Investment is in line with the Group’s investment
policy to make equity investments in companies that are synergistic to the Group’s business.
Accordingly, the Company believes that the Maxone Investment will be fair and reasonable and
in the interests of the Company and the Shareholders as a whole. There is no side arrangement
or agreement between the Company and Maxone with respect to the Maxone Investment. The
considerations for the Maxone Investment will be satisfied by the Group’s own source of funds
other than the proceeds from the Global Offering.
The Company has applied for, and the Stock Exchange has granted, a waiver from strict
compliance with Rules 4.04(2) and 4.04(4)(a) of the Listing Rules in respect of the Maxone
Investment on the following grounds:
The requested waiver would not prejudice the interests of the investing public to the
Company
(a) The total number of shares of Maxone that the Company subscribed for after the
Track Record Period only represented approximately 0.73% of the enlarged share
capital of Maxone and all applicable percentage ratios calculated in accordance with
Rule 14.07 of the Listing Rules are expected to be less than 5%.
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(b) Based on the minority equity investment nature of the Maxone Investment, the
Company is not and will not be able to exercise control over Maxone at board or
shareholders’ level.
(c) The shares of Maxone subscribed for by the Company pursuant to the Maxone
Investment will only be accounted for as financial assets, and the financials of
Maxone will not be consolidated into the financials of the Company.
(d) The Maxone Investment will not result in any material changes to the Group’s
financial position since June 30, 2025 and all information that is reasonably
necessary for the potential investors to make an informed assessment of the
activities of the Company’s financial position has been included in this prospectus.
As such, the Company considers a waiver from compliance with Rules 4.04(2) and
4.04(4)(a) of the Listing Rules would not prejudice the interests of the investing public to the
Company.
It would be impracticable and unduly burdensome to reproduce the relevant information
for strict compliance with Rules 4.04(2) and 4.04(4)(a) of the Listing Rules
The Company has no access to the books or records of Maxone for conducting an audit
given that the Company will not, as a result of or immediately following the completion of the
Maxone Investment, have any control over Maxone, nor will the Company have any
representative on or control over its board of directors, or be in a position to consolidate the
financials of Maxone.
As the Company will not have sufficient information to prepare the historical financial
information of Maxone in accordance with the IFRS Accounting Standards and Maxone has
already publicly disclosed its prospectus for the investors, it would be impracticable and
unduly burdensome for the Company to reproduce the relevant information required under
Rules 4.04(2) and 4.04(4)(a) of the Listing Rules for inclusion in this prospectus.
Alternative information has been provided in this prospectus
The Company has disclosed alternative information about the Maxone Investment in this
prospectus. Such information includes those which would be required for a discloseable
transaction under Chapter 14 of the Listing Rules that the Directors consider to be material,
including, for example, descriptions of the principal business activities of Maxone, the
consideration amounts, and a statement as to whether the counterparties are Independent Third
Parties. As such, the Company believes that the current disclosure with respect to the Maxone
Investment is adequate for potential investors to form an informed assessment of the Company.
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In addition, after the Track Record Period and up to the Latest Practicable Date, the Group
has proposed to conduct the following investments (the “ Proposed Investments ”), details of
which are set out below:
No. Name of the target
Total
consideration
Approximate
percentage of
shareholding after
completion of the
relevant
investment
Principal business
activities
1 Hefei Kuxin
Microelectronics Co.,
Ltd. (ٰ
ʮ̡,“ Hefei
Kuxin ”)
(1)
RMB339 million 12.78% Design and sales of
edge SoC chips
2 Hangzhou Nano-Core
Chip Electronic
Technology Co., Ltd.
(Ҧ
ʮ̡,“ Nano-Core
Chip ”)
(2)
RMB50 million 3.82% Design and sales of
SRAM-based CIM
chips
Notes:
(1) The Company has entered into an investment agreement to subscribe for the increased share capital in
Hefei Kuxin and acquire certain share capital held by certain existing shareholders of Hefei Kuxin. The
consideration was determined after arm’s length negotiations with reference to the financial position and
business prospects of Hefei Kuxin. Such investment is subject to the fullfilment of conditions precedent
set out in the investment agreement and might not be materialized. To the best knowledge, information
and belief of the Directors and having made all reasonable enquiry, each of Hefei Kuxin, the relevant
counterparties and the ultimate beneficial owners of Hefei Kuxin and the relevant counterparties is an
Independent Third Party.
(2) The Company has proposed to subscribe for the increased registered capital in Nano-Core Chip and
acquire certain registered capital held by certain existing shareholders of Nano-Core Chip. The
consideration was determined after arm’s length negotiations with reference to the financial position and
business prospects of Nano-Core Chip. Such investment (including the total consideration and the
corresponding shareholding in Nano-Core Chip after completion of the investment) is subject to
negotiations and adjustments and might not be materialized. To the best knowledge, information and
belief of the Directors and having made all reasonable enquiry, each of Nano-Core Chip, the relevant
counterparties and the ultimate beneficial owners of Nano-Core Chip and the relevant counterparties is
an Independent Third Party.
The Company believes that the Proposed Investments will create synergy effect between
the businesses of the Group and the targets and therefore optimize the Group’s business
development and financial performance. Accordingly, the Company believes that the Proposed
Investments will be fair and reasonable and in the interests of the Company and the
Shareholders as a whole. There is no side arrangement or agreement between the Company and
the relevant counterparties with respect to the Proposed Investments. The considerations for
the Proposed Investments, if materialized, will be satisfied by the Group’s own source of funds
other than the proceeds from the Global Offering. To the best knowledge of the Company, there
is no overlap among the ultimate controller(s) of each of Maxone, Hefei Kuxin and Nano-Core
Chip.
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The Company has applied for, and the Stock Exchange has granted, a waiver from strict
compliance with Rules 4.04(2) and 4.04(4)(a) of the Listing Rules in respect of the Proposed
Investments on the following grounds:
The percentage ratios of the Proposed Investments are expected to be less than 5% by
reference to the most recent fiscal year of the Track Record Period
The applicable percentage ratios calculated in accordance with Rule 14.07 of the Listing
Rules for each of the Proposed Investments are expected to be less than 5% by reference to the
financial year ended December 31, 2024. Accordingly, the Company does not expect the
Proposed Investments to result in any significant changes to its financial position since
December 31, 2024, and all information that is reasonably necessary for potential investors to
make an informed assessment of the activities or financial position of the Group has been
included in this prospectus. As such, the Company considers that a waiver from compliance
with the requirements under Rules 4.04(2) and 4.04(4)(a) of the Listing Rules would not
prejudice the interests of the investors.
The historical financial information of the targets is not available and would be unduly
burdensome to obtain or prepare
The Company has no access to the books or records of the targets for conducting an audit
given that the Company will not, as a result of or immediately following the completion of the
Proposed Investments, have any control over the targets, nor will the Company have any
control over the targets’ boards of directors, or be in a position to consolidate the financials of
the targets. As such, the Company believes that it would be impractical and unduly burdensome
for the Company to disclose the audited financial information of the targets as required under
Rules 4.04(2) and 4.04(4)(a) of the Listing Rules.
In addition, having considered the Proposed Investments to be immaterial and that the
Company does not expect the Proposed Investments to have any material effect on its business,
financial condition or operations, the Company believes that (i) it would not be meaningful and
would be unduly burdensome for it to prepare and include the financial information of the
targets during the Track Record Period in this prospectus, and (ii) the non-disclosure of the
required information pursuant to Rules 4.04(2) and 4.04(4)(a) of the Listing Rules would not
prejudice the interests of the investors.
Ordinary and usual course of business
The targets are engaged in business activities complementary with and closely related to
the existing business of the Group. As such, the Proposed Investments, if materialized, are
expected to create synergy effect between the businesses of the Group and the targets. The
Group has conducted acquisitions and minority investments during the Track Record Period.
As a result, the Company is of the view that conducting the Proposed Investments is within its
ordinary and usual course of business.
W AIVERS AND EXEMPTION
–8 9–


--- page 100 ---
Alternative disclosure of the Proposed Investments in this prospectus
The Company has disclosed alternative information about the Proposed Investments in
this prospectus. Such information includes those which would be required for a discloseable
transaction under Chapter 14 of the Listing Rules that the Directors consider to be material,
including, for example, descriptions of the principal business activities of the targets, the
consideration amounts, and a statement as to whether the counterparties are Independent Third
Parties. As such, the Company believes that the current disclosure is adequate for potential
investors to form an informed assessment of the Company.
CONSENT IN RESPECT OF THE PROPOSED SUBSCRIPTION OF H SHARES BY A
CORNERSTONE INVESTOR WHO IS A CONNECTED CLIENT
Paragraph 1C(1) of Appendix F1 to the Listing Rules provides that no allocations will be
permitted to “connected clients” of the overall coordinator(s), any syndicate member(s) (other
than the overall coordinator(s)) or any distributor(s) (other than syndicate member(s))
(collectively, the “ Distributors ”, and each a “ Distributor ”), without the prior written consent
of the Stock Exchange.
Paragraph 1B(7) of the Appendix F1 to the Listing Rules states that “connected client” in
relation to an exchange participant means any client which is a member of the same group of
companies as such exchange participant.
Huatai Capital Investment Limited (“ HTCI ”) has entered into certain cornerstone
investment agreements with the Company, China International Capital Corporation Hong Kong
Securities Limited and Huatai Financial Holdings (Hong Kong) Limited (“ Huatai ”). HTCI and
Huatai Securities Company Limited (“ HTSC ”) will enter into a series of cross border delta-one
OTC swap transactions (the “ Yuanfeng Asset Management OTC Swaps ” and the
“Greenwoods OTC Swaps ”) with each other and their ultimate clients (the “ HTCI Ultimate
Client (Yuanfeng Asset Management) ” and the “ HTCI Ultimate Clients (Greenwoods) ”),
respectively, pursuant to which HTCI will hold the Offer Shares on a non-discretionary basis
to hedge the Y uanfeng Asset Management OTC Swaps and the Greenwoods OTC Swaps,
respectively, while the economic risks and returns of the underlying Offer Shares are passed
to the HTCI Ultimate Client (Y uanfeng Asset Management) and HTCI Ultimate Clients
(Greenwoods). HTCI, HTSC and Huatai, one of the Joint Sponsors, Overall Coordinators and
Underwriters of the Global Offering, are members of the same group of companies.
Accordingly, HTCI is a connected client of Huatai.
We have applied for, and the Stock Exchange has granted, a consent under paragraph
1C(1) of Appendix F1 to the Listing Rules to permit HTCI (in connection with the Y uanfeng
Asset Management OTC Swaps and the Greenwoods OTC Swaps) to participate in the Global
Offering as a cornerstone investor on the following basis and conditions as set out in Paragraph
6 of Chapter 4.15 of the Guide for New Listing Applicants:
W AIVERS AND EXEMPTION
–9 0–


--- page 101 ---
(a) any Offer Shares to be allocated to HTCI will be held on behalf of independent third
parties;
(b) the cornerstone investment agreements of HTCI do not contain any material terms
which are more favorable to HTCI than those in other cornerstone investment
agreements;
(c) no preferential treatment has been, nor will be, given to HTCI by virtue of its
relationship with Huatai, in any allocation of Offer Shares in the International
Offering other than the assured entitlement under the cornerstone investment
agreements;
(d) HTCI confirms that to the best of its knowledge and belief, it has not received and
will not receive preferential treatment in the allocation of Offer Shares in the Global
Offering as a cornerstone investor by virtue of its relationship with Huatai, other
than the assured entitlement under the relevant cornerstone investment agreements;
(e) each of the Company, the Overall Coordinators and HTCI has provided the Stock
Exchange with written confirmations in accordance with Chapter 4.15 of the Guide
for New Listing Applicants; and
(f) details of the cornerstone investments and details of the allocations will be disclosed
in this prospectus and the allotment results announcement.
W AIVERS AND EXEMPTION
–9 1–


--- page 102 ---
DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus, for which the Directors collectively and individually accept full
responsibility, includes particulars given in compliance with the Listing Rules, the Companies
(Winding Up and Miscellaneous Provisions) Ordinance and the Securities and Futures (Stock
Market Listing) Rules (Chapter 571V of the Laws of Hong Kong) for the purpose of giving
information to the public with regard to the Group. The Directors, having made all reasonable
enquiries, confirm that to the best of their knowledge and belief, the information contained in
this prospectus is accurate and complete in all material respects and not misleading or
deceptive, and there are no other matters the omission of which would make any statement
herein or this prospectus misleading.
RESTRICTIONS ON OFFER AND SALE OF H SHARES
Each person acquiring the Hong Kong Offer Shares under the Hong Kong Public Offering
will be required to, or be deemed by his acquisition of Hong Kong Offer Shares to, confirm that
he is aware of the restrictions on the offer and sale of the Hong Kong Offer Shares described
in this prospectus.
No action has been taken to permit a public offering of the H Shares or the distribution
of this prospectus in any jurisdiction other than Hong Kong. Accordingly, and without
limitation to the following, this prospectus may not be used for the purpose of, and does not
constitute, an offer or invitation in any jurisdiction or in any circumstances in which such an
offer or invitation is not authorized or to any person to whom it is unlawful to make such an
offer or invitation for subscription. The distribution of this prospectus and the offering and sale
of the Offer Shares in other jurisdictions are subject to restrictions and may not be made except
as permitted under the applicable securities laws of such jurisdictions pursuant to registration
with or authorization by the relevant securities regulatory authorities or an exemption
therefrom. In particular, the Offer Shares have not been publicly offered and sold, and will not
be offered and sold, directly or indirectly, in Chinese Mainland or the U.S..
CSRC FILING
The Company has obtained a filing notice dated December 9, 2025 from the CSRC for the
Global Offering and the Listing. No other approvals under the PRC laws and regulations are
required to be obtained for the listing of the H Shares on the Stock Exchange.
INFORMATION ON THE GLOBAL OFFERING
This prospectus is published solely in connection with the Hong Kong Public Offering.
For applications under the Hong Kong Public Offering, this prospectus contains the terms and
conditions of the Hong Kong Public Offering.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 2–


--- page 103 ---
The Hong Kong Offer Shares are offered solely on the basis of the information contained
and representations made in this prospectus and on the terms and subject to the conditions set
out herein and therein. No person is authorized to give any information in connection with the
Global Offering or to make any representation not contained in this prospectus, and any
information or representation not contained herein must not be relied upon as having been
authorized by the Company, the Joint Sponsors, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market
Intermediaries, the Underwriters, any of their respective affiliates or any of their respective
directors, officers, employees, advisors, agents or representatives, or any other persons or
parties involved in the Global Offering.
The Listing is sponsored by the Joint Sponsors and the Global Offering is managed by the
Overall Coordinators. Pursuant to the Hong Kong Underwriting Agreement, the Hong Kong
Public Offering is fully underwritten by the Hong Kong Underwriters under the terms and
conditions of the Hong Kong Underwriting Agreement and is subject to the Company and the
Overall Coordinators (for themselves and on behalf of the Underwriters) agreeing on the Offer
Price. The International Offering is expected to be fully underwritten by the International
Underwriters and subject to the terms and conditions of the International Underwriting
Agreement. For further details on the Underwriters and the underwriting arrangements, see
“Underwriting.”
Neither the delivery of this prospectus nor any offering, sale, delivery, subscription or
acquisition made in connection with the Offer Shares shall, under any circumstances, constitute
a representation or create any implication that there has been no change in the Group’s affairs
since the date of this prospectus or that the information in this prospectus is correct as of any
date subsequent to the date of this prospectus.
For details of the structure of the Global Offering, including its conditions and the
arrangements relating to the Offer Size Adjustment Option, the Over-allotment Option and
stabilization, see “Structure of the Global Offering.”
APPLICATION FOR LISTING OF THE H SHARES ON THE STOCK EXCHANGE
The Company has applied to the Stock Exchange for the granting of listing of, and
permission to deal in, the H Shares to be issued pursuant to the Global Offering (including any
H Shares which may be issued pursuant to the exercise of the Offer Size Adjustment Option
and the Over-allotment Option). Dealings in the H Shares on the Stock Exchange are expected
to commence on Tuesday, January 13, 2026. Except for the A Shares that have been listed on
the Shanghai Stock Exchange and the Company’s pending application to the Stock Exchange
for the listing of, and permission to deal in, the H Shares, no part of the Company’s Share or
debt securities is listed on or dealt in on the Stock Exchange or any other stock exchange and
no such listing or permission to list is being or proposed to be sought in the near future.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 3–


--- page 104 ---
Under section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, any allotment made in respect of any application will be invalid if the listing of,
and permission to deal in, the H Shares on the Stock Exchange is refused before the expiration
of three weeks from the date of the closing of the application lists, or such longer period (not
exceeding six weeks) as may, within the said three weeks, be notified to the Company by or
on behalf of the Stock Exchange.
H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of listing of, and permission to deal in, the H Shares on the Stock
Exchange and the Company’s compliance with the stock admission requirements of HKSCC,
the H Shares will be accepted as eligible securities by HKSCC for deposit, clearance and
settlement in CCASS with effect from the date of commencement of dealings in the H Shares
on the Stock Exchange or any other date as determined by HKSCC. Settlement of transactions
between participants of the Stock Exchange is required to take place in CCASS on the second
settlement day after any trading day. All activities under CCASS are subject to the General
Rules of HKSCC and the HKSCC Operational Procedures in effect from time to time. All
necessary arrangements have been made for the H Shares to be admitted into CCASS. Investors
should seek the advice of their stockbrokers or other professional advisers for the details of the
settlement arrangements as such arrangements may affect their rights and interests.
H SHARE REGISTER OF MEMBERS AND STAMP DUTY
All of the H Shares issued pursuant to applications made in the Global Offering will be
registered on the Company’s H Share register of members to be maintained in Hong Kong by
the H Share Registrar. The Company maintains the register of members at its headquarters in
Chinese Mainland, based on certificates provided by the securities registration institution.
Dealings in the H Shares registered in the H Share register of members will be subject to
Hong Kong stamp duty.
PROFESSIONAL TAX ADVICE RECOMMENDED
Y ou should consult your professional advisers if you are in any doubt as to the taxation
implications of subscribing for, purchasing, holding, disposal of, dealing in or the exercise of
any rights in relation to the H Shares. None of the Company, the Joint Sponsors, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers,
the Underwriters, the Capital Market Intermediaries, any of their affiliates or any of their
respective directors, officers, employees, advisers, agents or representatives, or any other
persons or parties involved in the Global Offering accepts responsibility for any tax effects on,
or liabilities of, any person resulting from the subscription, purchase, holding, disposal of,
dealing in, or the exercise of any rights in relation to, the H Shares.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 4–


--- page 105 ---
LANGUAGE
If there is any inconsistency between this prospectus and its Chinese translation, the
English version of this prospectus shall prevail. The English names of the laws and regulations,
government authorities, institutions, natural persons, other entities (including certain of the
Company’s subsidiaries), facilities, certificates and titles of Chinese Mainland included in this
prospectus are translations of their Chinese names for identification purposes only. In the event
of any inconsistency, the Chinese version shall prevail.
ROUNDING
Certain amounts and percentage figures, such as share ownership and operating data,
included in this prospectus may have been subject to rounding adjustments. Accordingly,
figures shown as totals in certain tables may not be an arithmetic aggregation of the figures
preceding them. Any discrepancies in any table, chart or elsewhere between totals and sums of
amounts listed therein are due to rounding.
CURRENCY TRANSLATIONS
Solely for your convenience, this prospectus contains translations among certain amounts
denominated in Renminbi, Hong Kong dollars and U.S. dollars.
Unless otherwise specified, (i) the translations between Renminbi and U.S. dollars were
made at the rate of RMB7.07520 to US$1.00, (ii) the translations between Hong Kong dollars
and Renminbi were made at the rate of RMB0.90699 to HK$1.00, and (iii) the translations
between U.S. dollars and Hong Kong dollars were made at the rate of HK$7.78090 to US$1.00.
No representation is made that any amounts in RMB, Hong Kong dollars or U.S. dollars
can be or could have been at the relevant dates converted at the above rate or any other rates
or at all.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 5–


--- page 106 ---
DIRECTORS
Name Address Nationality
Executive Directors
Mr. Zhu Yiming (׼44 Exhibition Hall Road
Xicheng District
Beijing
PRC
Chinese
Mr. He Wei ( Оሊ) Room 1201, Building 1
2 Siyingmen North Road
Fengtai District
Beijing
PRC
Chinese
Mr. Hu Hong (ݳߡ1104, West Unit, Building 16
16 Zhixin Beili
Haidian District
Beijing
PRC
Chinese
Non-Executive Director
Ms. Wen Tian (ܫBuilding 5
3 Qingnian Road Xili
Chaoyang District
Beijing
PRC
Chinese
Independent Non-Executive
Directors
Mr. Zhou Haitao ( մऎᏹ) 5 Zhang Zizhong Road
Dongcheng District
Beijing
PRC
Chinese
Dr. Qian He ( ፺ᚲ) 507, Unit 4, Building 16
Hua Y an Li
Chaoyang District
Beijing
PRC
Chinese
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 6–


--- page 107 ---
Name Address Nationality
Ms. Y eung Siuman Shirley
(เʃත)
Room 2802
Pacific Place Apartments
88 Queensway
Hong Kong
Chinese
(Hong Kong)
Dr. Chen Jie ( ௓ᆎ) Room 114, Apartment 22
Weixiu Garden, Peking University
Haidian District
Beijing
PRC
Chinese
Mr. Zheng Xiaodong (؇603, Unit 3, 6/F
Building 26, Daliubukou Street
Xicheng District
Beijing
PRC
Chinese
For further details, see “Directors and Senior Management.”
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 7–


--- page 108 ---
Joint Sponsors China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Huatai Financial Holdings
(Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
Sponsor-Overall Coordinator Huatai Financial Holdings
(Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
Overall Coordinators China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Huatai Financial Holdings
(Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
Joint Global Coordinators, Joint
Bookrunners, Joint Lead Managers and
Capital Market Intermediaries
China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Huatai Financial Holdings
(Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 8–


--- page 109 ---
Legal Advisors to the Company As to Hong Kong and U.S. laws:
Freshfields
55th Floor, One Island East
Taikoo Place, Quarry Bay
Hong Kong
As to PRC law:
King & Wood Mallesons
18th Floor, East Tower
World Financial Center
No. 1 Dongsanhuan Zhonglu
Chaoyang District
Beijing
PRC
As to international export control, sanctions
and tariff laws:
DLA Piper Singapore Pte. Ltd.
80 Raffles Place
#48-01 UOB Plaza 1
Singapore
Legal Advisors to the Joint Sponsors and
the Underwriters
As to Hong Kong and U.S. laws:
Clifford Chance
27/F, Jardine House
One Connaught Place
Central
Hong Kong
As to PRC law:
Zhong Lun Law Firm
22-24/F & 27-31/F
South Tower of CP Center
20 Jin He East Avenue
Chaoyang District
Beijing
PRC
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 9–


--- page 110 ---
Auditor and Reporting Accountants KPMG
Certified Public Accountants
Public Interest Entity Auditor registered in
accordance with the Accounting and
Financial Reporting Council Ordinance
8th Floor, Prince’s Building
10 Chater Road
Central
Hong Kong
Industry Consultant Frost & Sullivan (Beijing) Inc.,
Shanghai Branch Co.
Room 2504
Wheelock Square
No. 1717 West Nanjing Road
Shanghai
PRC
Receiving Bank CMB Wing Lung Bank Limited
14/F, CMB Wing Lung Bank Building
45 Des V oeux Road
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 100 –


--- page 111 ---
Registered Office Room 101, 1/F to 5/F, Building 8
No. 9 Fenghao East Road
Haidian District
Beijing
PRC
Headquarters and Principal Place of
Business in the PRC
Room 101, 1/F to 5/F, Building 8
No. 9 Fenghao East Road
Haidian District
Beijing
PRC
Place of Business in Hong Kong Room 1915, 19/F
Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
Joint Company Secretaries Ms. Dong Lingyan ( ໨ᜳዲ)
Room 101, 1/F to 5/F, Building 8
No. 9 Fenghao East Road
Haidian District
Beijing
PRC
Ms. Wong Wai Y ee, Ella ( රᅆՅ)
(FCG, HKFCG)
Room 1915, 19/F
Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
CORPORATE INFORMATION
– 101 –


--- page 112 ---
Authorised Representatives Mr. Hu Hong (ݳߡ)
Room 101, 1/F to 5/F, Building 8
No. 9 Fenghao East Road
Haidian District
Beijing
PRC
Ms. Wong Wai Y ee, Ella ( රᅆՅ)
Room 1915, 19/F
Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
Audit Committee Mr. Zhou Haitao ( Chairperson )
Dr. Qian He
Ms. Y eung Siuman Shirley
Nomination Committee Dr. Qian He ( Chairperson )
Dr. Chen Jie
Mr. Zheng Xiaodong
Remuneration and Appraisal Committee Dr. Chen Jie ( Chairperson )
Mr. Zheng Xiaodong
Mr. Zhou Haitao
Strategy and Sustainable Development
Committee
Mr. Zhu Yiming ( Chairperson )
Dr. Qian He
Ms. Y eung Siuman Shirley
Compliance Advisor Altus Capital Limited
21 Wing Wo Street
Central
Hong Kong
H Share Registrar Tricor Investor Services Limited
17/F, Far East Finance Centre
16 Harcourt Road
Hong Kong
CORPORATE INFORMATION
– 102 –


--- page 113 ---
Principal Banks China Merchants Bank Co., Ltd. Beijing
Tsinghua Park Science and Technology
Finance Sub-Branch
B1G03, 1/F, Building 8
1 Zhongguancun East Road
Haidian District
Beijing
PRC
Shanghai Pudong Development Bank
Co., Ltd. Beijing Xuanwu Sub-Branch
316 Guang An Men Nei Avenue
Xicheng District
Beijing
PRC
Company’s Website www.gigadevice.com
(A copy of this prospectus is available on
the Company’ s website. Except for the
information contained in this prospectus,
none of the other information contained on
the Company’ s website forms part of this
prospectus)
CORPORATE INFORMATION
– 103 –


--- page 114 ---
Certain information and statistics set out in this section have been extracted from
various official government publications, market data providers and a report
commissioned by us and prepared by an independent third party, Frost & Sullivan. The
information from official government sources has not been independently verified by us,
the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Underwriters, the Capital Market
Intermediaries or any of their respective directors, officers, employees, agents, advisers
or representatives or any other parties involved in the Global Offering, and no
representation is given as to its accuracy, fairness and completeness.
OVERVIEW OF GLOBAL SEMICONDUCTOR INDUSTRY
Definition, Classification and Market Structure of Semiconductors
Semiconductor products are generally divided into three major categories: IC, discrete
devices, and optoelectronic devices. Among them, IC are the cornerstone of the semiconductor
industry and occupy the largest market share for more than 80% of the total market share of
semiconductor industry in 2024.
In the segmented fields of the IC market, the memory chips, logic chips and analog chips
are mainstream product categories, collectively accounting for 89% of the total market share
of IC in 2024.
Market Share of IC and Memory Chip, Global, 2024
32%18% Memory Chip
Logic Chip
Analog Chip
Others
Memory
Chip: 32%Analog Chip:
18%
Logic Chip:
39%
DRAM
NAND Flash
NOR Flash
Others
DRAM: 56%
NAND Flash:
41%
NOR Flash: 2%
Source: Frost & Sullivan, WSTS
INDUSTRY OVERVIEW
– 104 –


--- page 115 ---
IC Market Value Chain
The upstream of IC market are raw materials (silicon wafers, photoresists, electronic
specialty gases, photomasks), electronic design automation (EDA) software (circuit design,
layout drawing, and simulation verification), and semiconductor equipment (lithography
machines, etching machines, thin-film deposition equipment, testing equipment). The
midstream focuses on chip design and manufacturing. Chip design companies design
characteristic chip architectures and modules according to the needs of different scenarios such
as consumer electronics and automobiles, and can adopt the fabless model to focus on design
or the IDM model. At the pricing strategy level, fabless and IDM share similarities. At the
technical level, fabless focuses more on the chip design segment, while IDM needs to equally
emphasize both design and production. From a business model perspective, fabless enjoys
greater operational flexibility due to the absence of its own manufacturing facilities; in
contrast, IDM, as it owns manufacturing facilities, needs to bear the depreciation costs of the
corresponding production lines and exhibits relatively lower flexibility in terms of production
capacity arrangement. In product differentiation, fabless entities feature more agile product
iteration and faster market responsiveness, whereas IDMs excel in high-reliability, long-
lifecycle chip segments.
Wafer foundries undertake part of the manufacturing needs of fabless enterprises and
IDM enterprises, focusing on the chip manufacturing link. OSA T partners are responsible for
chip packaging and testing to ensure chip performance and yield. The downstream covers
industries such as consumer electronics, automobiles, robots, and communications.
Industry Chain of IC Industry
Source: Frost & Sullivan
EDA Software
Providers
IP Vendors
Equipment
Suppliers
Material
Suppliers
Fabless IC Design Companies
Outsourced
Fabrication Plants
IDM
Distributors
ODMs
Brands
End Application
Sectors:
Computing &
Storage,
Communications,
Automotive,
Consumer
Electronics,
Industrial
…
Equipment
and
materials
IC manufacturing
service
IC packaging
and test service
Design
service
Wafers or ICs
End
products
Upstream Midstream Downstream
Outsourced Assembly
and Test Vendors
Wafers
or ICs
Design Service
Company
Equipment & Material
Company
IC Design Companies
System
Manufacturers
Wafer assembly and test
service
INDUSTRY OVERVIEW
– 105 –


--- page 116 ---
Market Size of Global IC Market
IC, as the most critical segment of the semiconductor industry, have experienced
remarkable growth between 2020 and 2024, driven by the rapid development of key sectors
such as artificial intelligence and automotive. The global semiconductor industry experienced
a downturn during 2022-2023, leading to a marginal contraction in IC market size in 2023.
However, by 2024, the IC market began demonstrating uneven recovery patterns across various
application segments. The global IC market expanded from USD356.2 billion in 2020 to
USD515.3 billion in 2024, with a CAGR of 9.7%. Looking ahead, the market is expected to
continue its expansion, reaching USD900.3 billion by 2029.
With the vigorous development and strong demand in domestic downstream markets, the
importance of the Chinese market in the global landscape is set to further increase. China’s IC
market size grew from USD125.2 billion in 2020 to USD206.6 billion in 2024, with a CAGR
of 13.3%. This growth trend is projected to persist, with the market size expected to expand
to USD392.0 billion by 2029, and its global share is set to rise from 40.1% in 2024 to
approximately 43.5%. During this process, the Chinese market is benefiting from multiple
industrial opportunities, including the trend of artificial intelligence, ‘electrification,
intelligence and connectivity’ of automotive industry, and the rise of embodied intelligence,
continuously consolidating its position as the world’s largest single market of semiconductor
industry.
Market Size of IC Market (by Revenue),
Global, 2020-2029E
Market Size of IC Market (by Revenue),
China, 2020-2029E
USD Billion
2021 2023 2026E 2029E2020 2022 2025E 2024 2027E 2028E
0
200
400
600
1,000
800
356.2
426.8 456.6 433.0
515.3
593.6
670.3
746.5
822.8
900.3
USD Billion
2021 2023 2026E 2029E2020 2022 2025E 2024 2027E 2028E
0
100
200
300
400
125.2
148.5
169.1 172.0
206.6
241.9
277.9
314.7
352.5
392.0
Source: Frost & Sullivan, IMF , CSIA
INDUSTRY OVERVIEW
– 106 –


--- page 117 ---
Industry Cycle
The business and financial performance of participants in IC market are closely tied to the
cyclical nature of the semiconductor industry. This inherent cycle typically comprises recurring
phases of expansion, peak, downturn and recovery. The cycle is driven by a variety of factors,
including macroeconomic conditions, capital expenditure trends, technology transitions,
inventory adjustments, and adjustment in end-market demand and supply structure.
Historically, there has been no trend of fixed-duration cycles; instead, their cyclical
fluctuations are usually triggered by special events, such as the chip shortage and price surge
during the pandemic. In particular,
 from 2021 to 2022, the IC industry experienced a global supply shortage, which was
mainly caused by (i) soaring demand from remote work and online learning under
the COVID-19 restrictions and new technological trends like EVs and 5G, (ii)
supply disruptions from disasters, factory shutdowns and global logistics issues
caused by force majeure, geopolitical tension and pandemic, and (iii) slow
expansion of production capacity by major manufacturers due to long lead times and
market uncertainty. Such supply shortage drove downstream companies to increase
their inventory levels in anticipation of the ongoing supply shortages and constraint,
which in turn drove the continuous increase in selling prices of the IC products in
the market which reached their peak in recent years during that period. However,
such accumulation of inventories by downstream companies also resulted in an
inventory buildup throughout the supply chain, leading to elevated inventory levels
by the end of 2022;
 following the inventory buildup by the end of 2022 as mentioned above, from 2023,
the overall semiconductor industry entered into a downturn phase, featured by
weakened demand and falling price across different products, primarily driven by
destocking of downstream participants; and
 following the continuous destocking, the industry began to show signs of an uneven
recovery across certain end markets, while the competition in those markets remain
intense primarily due to the recovery and release of production capacity of the
upstream manufacturers after the alleviation of the impact from COVID-19 in 2024.
Taking a more granular view, at any given time, different sectors within the
semiconductor industry may be at different phases of the cycle, due to the intricate interactions
of the various factors mentioned above in different sectors. Therefore, the different sectors of
IC industry generally do not exhibit unified cyclicality. For example, due to its high sensitivity
to supply-demand dynamics and clear technological iteration rhythm, memory chips exhibit
distinct cyclicality, with a historical cycle typically spanning three to five years. This is mainly
attributed to the high concentration on the supply side as the commodity memories, which
represent the substantial majority of the memory chip market, were dominated by a few global
large players. In contrast, specialty memory chips, MCU and analog chips generally show
relatively weaker cyclicality. As such, a company with diverse products enjoys the resilience
to a certain extent against the industry cycle.
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For an IC design house operating under the fabless model, the primary raw material is the
wafer, which is manufactured by foundries. The cost of these wafers is closely linked to the
broader semiconductor industry cycle as discussed above. Accordingly, wafer prices
experienced an increase in 2021, followed by a decline in 2023, and a subsequent rebound in
2024. When setting the prices of their own products, IC design houses typically take into
account both historical wafer prices and future price forecasts. As a result, their product pricing
tends to move in tandem with fluctuations in wafer costs. However, due to the nature of the
manufacturing and supply chain processes, there is usually a time lag before changes in the cost
of raw materials are reflected in downstream product costs. This delay occurs because existing
inventory, contractual arrangements, and production lead times can buffer the immediate
impact of cost changes.
Primary Growth Drivers of Global Semiconductor Industry
AI Development Drives Semiconductor Industry Demand Expansion: Device
performance upgrades driven by edge AI applications have led to substantial growth in demand
for various memory and computing chips, while real-time decision-making and edge
intelligence applications are driving the adoption of high-performance MCU. Additionally, new
requirements such as high energy efficiency, high integration, and intelligence are promoting
performance upgrades across various analog chips. On the other hand, infrastructure of Cloud
AI requires comprehensive upgrades across the semiconductor supply chain. In terms of
memory chips, servers need to process petabytes of massive data. As AI model parameters
grow exponentially and training datasets continue to expand, demand for memory chips will
surge directly.
AI Architectures: Edge and Cloud
Data
Transmission
Personal Terminal
PC Smart
phone
Smart
wearables
Smart
earbuds
Industry Terminal
Sensor Robot
Engine Security
monitoring
Public cloud
SaaS/Web
Data Center
Storage
Server
Computing
Terminal
Equipment
Cloud Computing
Layer
The automotive industry is accelerating its evolution toward electrification,
intelligence, and connectivity: In recent years, sales of EV and intelligent vehicles have
increased significantly. Their electronic systems are significantly more complex than those of
traditional fuel-powered vehicles, with a substantial increase in the number of chips per
vehicle, driving up demand for automotive chips. For example, automotive-grade MCU have
been widely adopted in critical modules such as ADAS, BMS, electric drive control, and body
control, where they perform key functions in real-time control and functional safety. At the
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same time, electric and intelligent architectures place higher requirements on chips in terms of
computing power, energy efficiency, functional safety, and automotive-grade reliability, further
driving the continuous increase in the value of chips per vehicle and making them an important
source of incremental growth for the semiconductor industry.
High-performance industrial applications continue to upgrade: The accelerated
development of industrial automation (such as servo control, robotics, human-machine
interaction) and digital energy (such as integrated photovoltaics, energy storage, and charging
systems, inverters) is driving the semiconductor industry to upgrade toward higher reliability,
greater computing power, and longer lifespan. Industrial scenarios place higher demands on
MCU, memory chips, analog chips, etc., requiring compliance with standards such as wide
temperature and voltage ranges, strong anti-interference capabilities, high precision, and
long-cycle supply.
Analysis of Key Applications Driving Global Semiconductor Industry Growth
 Consumer electronics: Growth in shipments combined with increased AI penetration
Shipment & AI Penetration
Rate of Smartphone, Global,
2020 & 2024 & 2029E
Shipment & AI Penetration
Rate of PC, Global,
2020 & 2024 & 2029E
Shipment & AI Penetration
Rate of TWS Earbuds, Global,
2020 & 2024 & 2029E
0
500
2020
1,335.8
1,245.0
1,433.3
2024 2029E
1,000
1,500
Million Units
Phone Shipment
AI Penetration Rate
100%
80%
60%
40%
20%
0%
0.7%
16.2%
54.0%
0
150
2020
299.8
258.9
311.5
2024 2029E
250
350
Million Units
PC Shipment
AI Penetration Rate
100%
80%
60%
40%
20%
0%
0.5%
18.5%
69.2%
100
50
200
300
0
300
2020
279.6
437.5
548.0
2024 2029E
500
600
Million Units
TWS Earbuds Shipment
AI Penetration Rate
100%
80%
60%
40%
20%
0%
0.0% 1.2%
19.7%
200
100
400
Source: Frost & Sullivan, IMF
The increased penetration of AI is driving upgrades across IC products, particularly for
edge AI devices. While the overall shipment volumes of downstream products, such as
smartphones, PCs, and TWS earbuds, may fluctuate, the growing integration of AI continues
to fuel strong demand for high-quality IC components. In particular, specialty memory chips
and high-performance MCU are seeing increased demand, as they are crucial for delivering the
enhanced performance, responsiveness and functionality required by AI-enabled applications
at the edge.
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Consumer electronics is an important application field for semiconductors. Consumer
electronic products mainly include mobile phones, PC, wearable devices, etc. AI integration
has become the core trend for consumer electronics upgrades, significantly increasing the
performance requirements for semiconductor products in terms of computing power, storage
capacity, power consumption, and integration density.
Smartphones: As the category with the largest shipment share in consumer electronics,
global smartphone shipments reached 1,245.0 million units in 2024 and are projected to grow
to 1,433.3 million units by 2029, representing a CAGR of 2.9%.
In the mobile phone sector, NOR Flash is primarily used to store codes for screen display,
touch functions, baseband communication, etc. The development of AI mobile phones is
expected to further drive the upgrades of its capacity, interface bandwidth and reading speed
to meet the high-performance storage requirements of local AI inference.
PC: As a key category in consumer electronics, global PC shipments have maintained
steady growth. In 2024, worldwide PC shipments reached 258.9 million units and are projected
to increase to 311.5 million units by 2029. Driven by the wave of AI intelligence, PC are
rapidly evolving into AI PC, integrating AI capabilities to enable on-device large model
operation and multi-agent collaboration, transforming into full-scenario AI assistants.
In the PC motherboard sector, NOR Flash with a capacity of 256Mb or higher is now
widely used as the storage carrier for BIOS, and there is a continuous trend of increasing
capacity. In AI PC products, 512Mb NOR Flash is indispensable to support more complex
system initialization, multimodal perception, and local AI functions. In the future, NOR Flash
will benefit from the value growth brought by the demand for larger capacities, and the need
to deploy AI models locally on PC will also give rise to potential demand for customized
memory.
Wearable Devices: In the wave of smart wearable device development, glasses remain
one of the few sensory-assistive applications that have not been widely intelligentized, yet they
hold enormous potential for intelligence. AI glasses are smart wearable devices capable of
realizing real-time translation, AR navigation, and information reminders through
voice/gesture interaction. As a breakthrough in the electronification of visual senses, their
hardware architecture is centered on a main SoC, with a standard 128-256Mb NOR Flash to
ensure rapid system responsiveness. Screen-equipped models require additional small-capacity
NOR Flash for display functions, while low-cost products adopt eMCP integrated solutions to
reduce costs and accelerate the popularization of consumer-grade products.
Meanwhile, as another key category of wearable devices, AI earbuds are smart earphones
capable of achieving real-time translation, noise cancellation optimization, and health
monitoring through voice interaction. Global TWS earbuds shipment reached 437.5 million
units in 2024 and are projected to grow to 548.0 million units by 2029, with a CAGR of 4.2%.
TWS earbuds have clearly demonstrated a trend toward transitioning to AI earbuds, driving a
capacity upgrade of NOR Flash from 64Mb to 256Mb.
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Application of Memory Chips, MCU, Analog Chip,
and Touch Controller Chip in AI Glasses (Schematic)
MCU
Touch Controller
Nor Flash
 Core applications: Fast Startup, Firmware Storage, Dynamic
Focus Adjustment
 Key trend: Real-time AR rendering has increased the demand for
high-performance storage, driving medium-to-large capacity NOR
Flash to become a new growth point in the memory market.
Analog Chip
SLC NAND Flash Core applications: Sensor management, Tactile Feedback Drive
 Key trend: The increasing complexity of AI glasses applications has driven the
continuous improvement in the number and performance of MCU cores.
 Core applications: Power Management, Display Driving, Lithium
Battery Protection
 Key trend: The triple high-precision demands of display, sensing, and
power supply drive the rapid improvement of analog chip integration.
 Core applications: Gesture Recognition, Temple Interaction
 Key trend: Multi-modal interaction methods have driven the improvement
of touch chip sensitivity performance.
 Core applications: System Caching, Fast Startup, Data Temporary Storage
 Key trend: The localization of AI models has driven the expansion of SLC NAND
capacity requirements.
In addition, in wearable devices, MCU are also equally important hardware cornerstones.
Taking AI glasses as an example, they are responsible for multi-sensor fusion, real-time
reasoning, and power consumption scheduling for cameras, micro-displays, and wireless links.
As wearable devices upgrade toward long battery life, spatial interaction, and local AI
experiences, their reliance on high-energy-efficiency and high-integration MCU has
significantly increased.
 Automotive: Acceleration of “Electrification, Intelligence and Connectivity” process
Automobiles, as another important application scenario for semiconductor chips, have a
large demand for them. The demand for EV will further increase in the future, which will
consequently lead to higher performance requirements for automotive chips and computing
power upgrades, thereby driving the smart penetration rate of vehicle.
Shipment, EV&Smart Penetration Rate of Vehicle, Global, 2020-2029E
0
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
76.7 81.4 80.4
87.0 89.3 90.9 92.3 93.6 94.8 96.0
35.6%
43.4%
49.4%
54.8% 57.7%
63.5%
73.0% 86.2% 90.5% 92.4%
4.2% 8.1%
13.7% 16.9% 20.6% 24.3% 27.6% 30.7% 35.1% 39.7%
20
40
60
80
100
Million Units
Vehicle Shipment NEV Penetration Rate Smart Penetration Rate
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Source: Frost & Sullivan, CPCA
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Automotive is the most extensive and core application scenario for MCU. As the
functional complexity of EV and smart vehicles continues to increase, MCU have expanded
from widespread use in basic systems such as infotainment, smart cockpits, and body control
to critical functional modules requiring high safety and real-time performance, such as power
control, chassis domains, and ADAS. This evolution imposes higher requirements on MCU
computing power, interface capabilities, and functional safety levels (upgrading from ASIL-B
to ASIL-D). With the advancement of autonomous driving levels towards L3/L4, the
application demand for MCU in automobiles will further increase. Against the backdrop of
rapid development in autonomous driving, SoC and MCU serve complementary roles in
complex automobile systems. SoC, which integrated powerful CPUs, GPUs and other
specialized accelerators to handle high-performance tasks like perception and decision-making,
while MCU manage real-time control of subsystems with low power to ensure the reliable and
timely execution of control commands. Concurrently, the value of MCU per vehicle is expected
to rise from approximately RMB1,500 in 2024 to around RMB2,500 in EV in 2029.
NOR Flash is primarily used to store core code and critical data for vehicle-mounted
systems, including ADAS system. For niche DRAM products, high-generation automotive-
grade niche DRAMs with large capacities (LPDDR4/4X, DDR4) are clearly replacing
small-capacity DDR3 products in autonomous driving applications like ADAS.
 Other diversified downstream demand growth
Smart home: Smart home primarily includes smart security, home entertainment,
environmental control, etc. In the smart home sector, niche DRAM is mainly used to support
real-time data processing and command execution in devices such as smart TV and set-top
boxes. MCU plays a dual role in smart homes, serving as both power control and intelligent
interaction hubs.
Industrial Applications: As one of China’s key strategic directions, the upgrading and
transformation of industrial manufacturing is driving the industry toward digitalization,
networking, and intelligence. These technological evolutions place higher demands on the
real-time responsiveness, data throughput, and autonomous decision-making capabilities of
industrial equipment, which require extensive applications of high-performance and high-
reliability semiconductor products like MCU to achieve dual objectives of high-precision
control and intelligent interaction.
Embodied Intelligence: The core feature of embodied intelligence lies in the integration
of hardware-software collaborative real-time perception, cognitive reasoning, and precise
execution capabilities. Such systems pose system-level challenges in terms of heterogeneous
computing architectures, low-power high-computing-power chips, high-bandwidth memory,
real-time operating systems, and multi-sensor integration, driving the accelerated release of
demand for critical components such as high-performance MCU, AI SoC, sensors, and memory
chips.
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ANALYSIS OF GLOBAL SPECIALTY MEMORY CHIP MARKET
Definition and Classification of Major Specialty Memory Chips
Semiconductor memory is a broad category of memory products designed for mass-
market applications with standardized performance requirements. Depending on the
application-specific characteristics and technical features, semiconductor memories could be
further classified as specialty memories and commodity memories.
 Specialty memory refers to memory products applied in specific industries with
unique technology requirements such as high reliability, low power consumption or
operation in extreme environments, or hold competitive advantages in particular
market segments, mainly including niche DRAM, SLC NAND Flash and NOR
Flash. These products may use mature or specialized process nodes and focus less
on cost and more on fulfilling stringent application needs. Specialty memories are
typically characterized by (i) serving a broad and diverse range of downstream
applications (such as consumer electronics, automobiles, industrial applications (for
example, industrial automation, energy storage and battery management), PC and
servers, IoT and network communications); and (ii) varying requirements across
different downstream sectors and application scenarios in terms of storage capacity,
bandwidth, temperature thresholds and voltage. Niche DRAM, SLC NAND Flash,
and NOR Flash are classified as specialty memory chips because they are designed
for specific applications that require customized features including higher
reliability, longer product lifecycles and enhanced endurance. Unlike commodity
memory, they mainly serve niche markets such as industrial and automotive, where
standard solutions may not meet demanding technical requirements.
 Commodity memories are standardized, high-volume products designed mainly for
mainstream applications where cost-effectiveness, high capacity and performance
are key priorities, often achieved through the latest process nodes, mainly including
3D NAND Flash, mainstream DRAM, and high bandwidth memory. Commodity
memories are typically characterized by: (i) larger capacity and higher bandwidth;
and (ii) targeting concentrated, high-volume downstream markets such as
smartphones, PCs and servers, where individual sectors demand significant
production capacity. Thus, while commodity memories compete mainly on price and
scale, specialty memories are distinguished by their application-specific features
and ability to serve niche markets.
Depending on whether they retain data after power is removed, semiconductor memories
can be classified as either volatile or non-volatile. Niche DRAM is a form of volatile memory,
while NOR Flash and SLC NAND Flash are non-volatile and preserve data when unpowered.
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 Niche DRAM : Compared with mainstream DRAM — which prioritizes ever-higher
densities, peak transfer rates, tightly standardized specs, frequent technology node
migrations and pronounced cyclical demand — niche DRAM is typically built on
mature process technologies with more modest performance targets. Mainstream
DRAM is produced in large volumes and dominated by a few global players
operating under the IDM business model, primarily serving concentrated, high-
volume and price sensitive downstream markets. In contrast, the niche DRAM
delivers bespoke feature sets, long-lifecycle availability and rock-solid reliability
for distributed applications in automotive, industrial, communications and medical
markets, where demand is more stable and customization is essential. Current niche
DRAM products include LPDDR2/3, DDR2/3 and DDR4/LPDDR4 devices with
capacities below 8Gb, with a roadmap toward higher-capacity.
Notably, as discussed above, the life-cycle of niche DRAM is generally longer than
that of commodity DRAM, primarily due to differences in feature requirements and
market priorities. For instance, commodity DDR4, which serves mainstream markets
such as PCs, smart phones and servers, undergoes rapid upgrade cycles as the market
demands ever-higher performance and greater memory densities. As a result,
commodity DDR4 in these applications is gradually being replaced by newer
generations like DDR5. In contrast, niche DDR4, as a specialty memory, is widely
used in distributed applications across sectors such as network communications,
home appliances, set-top boxes, IoTs, automotive and industrial applications,
including areas like industrial automation and control, energy storage and battery
management. In these fields, niche DDR4 relies on mature manufacturing processes
and emphasizes attributes such as stability, reliability, and cost-effectiveness over
cutting-edge performance. Therefore, as compared that in the mainstream market,
niche DDR4 enjoys a longer life-cycle, which demonstrates an increasing demand
and is not expected to be phased out in the near future.
 NOR Flash: Although NAND Flash typically offers greater storage capacity and
faster write speeds, NOR Flash remains widely used in specific applications because
of its fast random read performance, low read error rate, support for execute-in-
place (XIP) and high data integrity, which allow processors to run code directly from
the flash memory. As such, NOR Flash is most often used to memory boot code and
firmware. It is widely deployed in automotive systems, wearables, industrial control
units, IoT and other end-points prioritizing fast startup and reliable code execution
rather than fast write speed.
 SLC NAND Flash: NAND Flash generally offers higher storage capacities and
faster write speeds than NOR Flash, making it well suited for bulk data memory and
thus broadly adopted. SLC NAND Flash provides significantly superior erase/write
endurance and data integrity compared with MLC/TLC NAND Flash, making it the
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preferred choice for industrial-edge memory, automotive dash-cams, consumer
electronics and other applications in scenarios which do not need to execute the code
directly from the memory that demand large capacity, fast write speed and high
reliability.
The table below sets forth the key differentiation between commodity memories and
specialty memories.
Commodity Memory Chips Specialty Memory Chips
Target market /H1118/H1118/H1118/H1118/H1118/H1118/H1118concentrated, high-volume
downstream markets
a broad and diverse range
of downstream niche
markets with varying
technology requirements
Technical &
Performance
Orientation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
pursue advanced process
nodes, high capacity, and
high bandwidth; aim for
optimal cost-performance
in general-purpose
scenarios
application-specific features
(e.g., low power, high
reliability, long
lifecycles); may use
mature or specialized
process nodes and focus
less on cost and more on
fulfilling stringent
application needs
Product
Standardization /H1118/H1118/H1118/H1118
highly standardized; strong
interchangeability; follow
universal technical
specifications
highly customized; designed
to meet unique technical
requirements of specific
applications
Typical Applications /H1118/H1118smartphones, PCs and
servers, where individual
sectors demand
significant production
capacity
consumer electronics,
automobiles, industrial
applications (such as
industrial automation,
energy storage and battery
management), PC and
servers, IoT and network
communications
Major products /H1118/H1118/H1118/H1118/H1118/H11183D NAND Flash,
mainstream DRAM and
high bandwidth memory
niche DRAM, SLC NAND
Flash and NOR Flash
Business Model
Market players operating under the IDM business model are particularly well-suited for
the commodity memory market, whereas players adopting the fabless business model are
generally more suitable for the specialty memory market. This distinction is driven by several
key factors:
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 Production Scale and Efficiency: IDMs control the full semiconductor production
process, achieving large-scale, cost-effective manufacturing. This is crucial for the
commodity memory market, which demands high volumes and competitive pricing.
 Standardization vs. Customization: The commodity memory market is driven by
standardized products for broad applications like PCs and mobile devices, playing
to IDM strengths. In contrast, specialty memory markets require more customized
features, including longer product lifecycles, and high reliability for specialized
sectors such as automotive and industrial. Fabless companies, which focus on design
and outsource manufacturing, are more agile and can better meet these customized
needs.
 Capital Requirements: The IDM model requires heavy investment in
manufacturing facilities and R&D, justifiable only by the high output of mainstream
DRAM. Fabless companies avoid these costs by outsourcing production, allowing
them to focus resources on innovation and customization, which is essential for the
lower-volume, higher-mix niche market.
 Supply Chain Flexibility: Fabless companies benefit from flexible supply chains
and can quickly adapt to changing specifications or market demands. This flexibility
is vital in specialty memory markets, where customer needs are more varied and
dynamic.
 Customer Engagement and Support: Specialty memory customers often need
close technical collaboration and long-term support. Fabless companies are typically
more responsive to these requirements, whereas IDMs concentrate on mass
production for standardized markets.
In the specialty memory market, fabless companies face unique challenges and need to
meet several key requirements to stand out from competitors. There is typically no single
solution or technology that can address all customer needs or guarantee success in the specialty
memory market. Instead, a company’s competitive advantages in specialty memories are
demonstrated through its comprehensive capabilities, including strengths in product design,
quality control, the breadth and depth of its product portfolio, close collaboration with
manufacturing partners and effective supply chain integration.
In particular, unlike mainstream memories, where products are highly standardized and
price-driven, specialty memories demand a higher degree of customization and reliabilities in
specific applications. To succeed in this field, a fabless company must demonstrate strong
capabilities in product design, rigorous quality control, and rapid iteration. Given that specialty
memories are often deployed in industrial, automotive, and other application-specific
scenarios, it is critical for fabless companies to ensure that every part number consistently
meets stringent performance and reliability standards, which typically requires maintaining a
diverse product portfolio.
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Additionally, robust platform management and the agility to update and optimize products
in response to evolving customer requirements are essential. Close collaboration with
manufacturing partners remains crucial, enabling fabless companies to uphold high standards
in process control and product consistency.
Equally important is the ability to integrate and manage a complex supply chain. Effective
supply chain integration ensures stable sourcing of materials, timely production and reliable
delivery, which are especially vital in the specialty memory market, where customers often
have strict lead time and quality requirements. By excelling in supply chain integration, fabless
companies can enhance responsiveness, minimize risks and maintain a competitive edge in
serving niche and mission-critical applications.
Market Size of Global Specialty Memory Chip Market
In 2024, the global specialty memory market totaled USD13.6 billion, with niche DRAM
contributing USD8.5 billion, NOR Flash USD2.8 billion and SLC NAND Flash USD2.3
billion. Looking ahead to the next five years, the growth of total data volume and sustained
demand for low-power, high-reliability and memory solutions in edge-AI and automotive-
electronics applications is expected to drive continued expansion of the specialty memory
market. At a projected CAGR of 7.1%, the market is forecast to reach USD20.8 billion by 2029.
By segment, niche DRAM is projected to reach USD13.2 billion, NOR Flash to USD4.2 billion
and SLC NAND Flash to USD3.4 billion by 2029.
The overall memory-chip industry is cyclical, historically running in roughly four-year
cycles over the past two decades. The cycle is driven by a variety of factors, including
macroeconomic conditions, capital expenditure trends, technology transitions, inventory
adjustments, and adjustment in end-market demand and supply structure. In 2023, after the
inventory buildup at the end of 2022, the memory market experienced a downturn, mainly
driven by continued capacity expansions by memory suppliers and a general slowdown in the
global economy. However, entering into 2024, following the continuous destocking efforts and
the easing of COVID-19 impacts, coupled with surging demand related to AI applications,
there was a strong rebound and the start of new growth phase that is expected to sustain in the
next several of years. See “— Overview of Global Semiconductor Industry — Industry Cycle.”
Over the long term, the industry is likely to follow a rising trend with cyclical fluctuations. The
specialty memory market is gradually decoupling from the commodity memory cycle, with
leading domestic manufacturers steadily increasing their market share.
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Market Size of Specialty Memory Chip Market, Global, 2020-2029E
USD Billion CAGR 2020-2024 2025E-2029E
Total 11.0% 7.1%
8.1% 7.6%NOR Flash
SLC NAND 6.3% 5.8%
Niche DRAM 13.5% 7.4%
2021 2023 2026E 2029E2020 2022 2025E 2024 2027E 2028E
0
10
20
35
25
15
5
30
5.1 7.0 6.9 6.3 8.5 9.9 12.2 11.5 11.3 13.21.8
2.2 2.1 1.6
2.3
2.7
3.5 3.4 3.1
3.4
2.0
2.8 2.7 2.2
2.8
3.1
3.8 3.5 3.4
4.2
9.0
11.9 11.7
10.0
13.6
15.8
19.5 18.4 17.8
20.8
Source: IMF , Frost & Sullivan
Analysis of Key Drivers of Specialty Memory Chip Market
 Proliferation of AI-Enabled Devices Drives Demand for Higher-Capacity Specialty
Memory Chips: As consumer electronics including smartphones, PC, wearables, and
smart home products continue to evolve toward AI integration, their requirements for data
processing and memory capabilities have increased significantly. These devices demand
higher-capacity, faster, and more reliable chips to support intelligent functions such as
multimodal interaction and large model operations, driving dedicated memory chips
toward greater capacity.
 Automotive ‘Electrification, Intelligence and Connectivity’ Drive Demand for
Automotive-Grade Memory: The ‘electrification, intelligence and connectivity’ in the
automotive industry are raising the bar for data memory in terms of reliability,
temperature and vibration resistance, and real-time read/write performance. For instance,
in intelligent driving scenarios, the massive sensor data generated by cameras and LiDAR
requires high-speed local caching and stable data writing, fueling a surge in demand for
high-performance NOR Flash. At the same time, infotainment systems, multimedia
stream processing, and OTA firmware upgrades enabled by smart cockpits are driving up
both the performance requirements and market demand for niche DRAM. As the global
EV market continues to expand, automotive-grade memory chips are emerging as a key
growth driver following the consumer electronics segment.
 The AI Era Presents Opportunities for Companies with Diverse Memory Chips: In
the AI era, both cloud and edge devices generate massive demand for memory chips,
creating significant growth opportunities across the memory industry. This shift is giving
rise to new product forms and technological innovations within the specialty memory
domain, unlocking fresh profit potential for industry players.
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OVERVIEW OF GLOBAL MCU MARKET
Definition and Classification of MCU
Microcontroller unit (MCU) is a small, integrated circuit that functions as a miniature
computer, which typically integrate key functional modules including a CPU, memories, data
converters and I/O interfaces. MCU are designed to control specific functions within larger
electronic systems, making them ideal for embedded systems. MCU are widely used in
control-oriented components or devices across various sectors including industrial automation,
automotive electronics, and household appliances. For example, the microcontroller inside a
washing machine manages motor control, water levels, and user interface buttons. Similarly,
MCU are used in electronic thermostats, remote controls, and basic IoT sensors – devices that
require real-time control but have modest processing and memory needs. As the backbone of
billions of end devices, MCU serve as a fundamental infrastructure of the digital economy. In
contrast, an System-on-Chip (SoC) is a more complex integrated chip that integrates not only
a CPU but also a range of other components such as GPUs, DSPs, memory controllers, wireless
modules and advanced peripherals. SoC are designed to perform more complex and diverse
functions, supporting entire systems such as smartphones, tablets and advanced embedded
applications, and not limited to control-oriented components or devices. In summary, MCU are
ideal for simple, real-time control tasks with limited resources, while SoC are suited for
complex applications requiring high processing power and multiple integrated functions.
Based on bus width, MCU can be classified into three categories: 8-bit, 16-bit, and 32-bit.
Among them, 32-bit MCU have become the mainstream in the market, accounting for over 60%
of the total, due to their powerful computing capabilities and ability to efficiently handle
complex data. As demand for high-performance applications continues to rise, the market share
of 32-bit MCU is expected to further expand.
Market Size of Global MCU Market
From a market size perspective, the global MCU market reached USD19.7 billion in 2024,
with a CAGR of 6.3% from 2020 to 2024. Looking ahead, as AI continues to penetrate various
sectors, the increasing functional complexity and intelligence of end-use applications, such as
automotive electronics, industrial control systems, and consumer electronics, are driving up the
demand of MCU. For instance, the value of MCU per vehicle in EV can exceed that of ICEV
by more than 60%.
At the same time, rising demands for real-time processing, low power consumption, and
functional safety are accelerating the adoption of 32-bit MCU. Driven by these factors, the
global MCU market is projected to reach USD29.3 billion by 2029, with a CAGR of 8.7%.
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Market Size of MCU Market (by Revenue), Global, 2020-2029E
CAGR (25E-29E): 8.7%
CAGR (20-24): 6.3%
USD Billion
2021 2023 2026E 2029E2020 2022 2025E 2024 2027E 2028E
0
10
20
25
15
5
30
15.5
18.6
20.5 21.2
19.7 21.0
22.6
24.5
26.7
29.3
Source: IMF , Frost & Sullivan
Key Drivers of Global MCU Market
The accelerated adoption of AI, along with the electrification, increased intelligence, and
enhanced connectivity within the automotive industry, as well as the growing demand for
high-performance industrial applications, are all key drivers of the global semiconductor
industry. See “— Overview of Global Semiconductor Industry — Primary Growth Drivers of
Global Semiconductor Industry.” These factors are also propelling the future growth of the
global MCU market. In addition to these major trends, the future development of the global
MCU market is further shaped by growth opportunities arising from other sectors, such as
white goods. For instance, smart refrigerators, air conditioners, and other household appliances
are undergoing significant connectivity and energy efficiency upgrades, all of which rely on the
reliable control and communication capabilities provided by MCU. As a result, the coordinated
growth of these sectors is expected to continuously expand the addressable market for mid- to
high-end MCU, supporting sustained market expansion.
OVERVIEW OF GLOBAL ANALOG CHIP MARKET
Definition and Classification of Analog Chips
Analog chips are responsible for power conversion and signal acquisition/conditioning,
and are mainly divided into Power Management IC and signal chain IC. PMIC handle energy
conversion, voltage regulation, and current management, while signal chain IC cover sensing,
interfacing, converting, timing and amplifying analog signals from sensors—together forming
the vital link between digital systems and the physical world.
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PMIC can be further classified into: (1) AC-DC converters: convert AC to low-voltage
DC and provide circuit protection. (2) DC-DC converters: convert external DC voltage into a
stable operating voltage required by digital chips. (3) Linear regulators: precisely regulate
external DC voltage through linear control methods. (4) Battery management IC: manage
battery charging, discharging, and safety monitoring.
Market Size of Global Analog IC Market
Amid the accelerated global buildout of AI data centers, the rising penetration of
electrification and intelligence in EV and the ongoing intelligent transformation of industrial
control and consumer electronics, the global analog IC market is entering a new cycle of
growth. The market size is projected to increase from USD83.1 billion in 2025 to USD112.8
billion by 2029, with a CAGR of 7.9%.
From a market segmentation perspective, PMIC play a critical role in key application
scenarios such as AI server power systems, EV electric drive platforms, and fast-charging
solutions for portable devices. From 2025 to 2029, the market size is expected to grow at a
CAGR of 8.3%.
Market Size of Analog IC Market (by Revenue), Breakdown by
Product Types, Global, 2020-2029E
USD Billion CAGR 2020-2024 2025E-2029E
Total 9.3% 7.9%
8.6% 8.3%PMIC
Signal Chain IC 10.4% 7.5%
55.7
74.1
89.0
81.2 79.4 83.1 88.7 95.6
103.5
112.8
21.1 28.3 34.4 31.7 31.3 33.4 36.1 38.5 41.3 44.6
34.6
45.8
54.6 49.5 48.1 49.7 52.6 57.1
62.2
68.3
2021 2023 2026E 2029E2020 2022 2025E 2024 2027E 2028E
0
40
80
140
100
60
20
120
Source: IMF , Frost & Sullivan
OVERVIEW OF GLOBAL SENSOR CHIP MARKET
A sensor chip is a component that collects various signals from the physical world, such
as temperature, pressure, light, motion and magnetic fields, and outputs them to a backend
system for further processing.
A capacitive touch sensing chip is an IC that identifies touch and other behaviors by
detecting changes in capacitance values. Its core function is to convert the electric field
changes caused by human contact into processable electrical signals. Capacitive touch sensing
chips are mainly used in smart phones, smart wearable devices, TWS earbuds, laptops, and
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other fields. Other emerging downstream applications include smart homes and automotive
touchscreens. The total global market size of touch sensing chips expanded from USD2.6
billion dollars in 2020 to USD2.9 billion dollars in 2024. Looking ahead, the market is
expected to continue to expand, reaching USD3.7 billion dollars by 2029.
A fingerprint chip is a core component for biometric identification based on
semiconductor sensing technology. Its main functions include live body detection, rapid
identity authentication, and secure data encryption. According to downstream applications, it
mainly covers smart phones, smart door locks, and financial payment terminals. The global
market size of fingerprint chips reached USD5.8 billion dollars in 2024. Driven by trends such
as the increasing penetration rate of full screen mobile phones, the security needs of smart
homes, and the upgrading of financial grade biometric authentication standards, the shipment
volume is expected to exceed USD8.9 billion dollars by 2029.
ANALYSIS OF THE COMPETITIVE LANDSCAPE OF THE COMPANY’S
INDUSTRIES
NOR Flash
In 2024, the global NOR Flash market remained relatively stable and highly concentrated,
with the top three companies accounting for approximately 63.2% of total market value. The
Company generated revenues of about USD512.2 million in 2024 equivalent to roughly 18.5%
market share securing the No. 2 position worldwide and underscoring the industry leadership.
It is also the top-ranked mainland Chinese company. Besides the Company, the key market
players in NOR Flash segment include Winbond Electronics Corporation, Macronix
International Co., Ltd. and Infineon Technologies AG.
Ranking of NOR Flash Market (Revenue), Global, 2024
Ranking Company Name Location NOR Flash Revenue
(USD Million) Market Share (%)
1 Company A
The Company
Company B
Top 3
2
3
Taiwan, China
Beijing, China
Taiwan, China
756.6
512.2
477.7
1,746.5
27.4%
18.5%
17.3%
63.2%
Source: Frost & Sullivan, Annual Reports
SLC NAND Flash
In 2024, the global SLC NAND Flash market was highly concentrated among overseas
and Taiwan-based suppliers, with the top three companies together accounting for 69.4% of the
total market value. With SLC NAND Flash revenues of approximately USD50.0 million, the
Company ranked sixth worldwide. It is also the highest ranked mainland Chinese company.
Besides the Company, the key market players in SLC NAND Flash segment include Kioxia
Corporation, Micron Technology, Inc. and Winbond Electronics Corporation.
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Ranking of SLC NAND Flash Market (Revenue), Global, 2024
Ranking Company Name Location
SLC NAND Flash
Revenue
(USD Million)
Market Share (%)
1 Company C
Company D
Company A
Top 6
2
3
Tokyo, Japan
Boise, United States
Taiwan, China
813.1
539.2
251.8
1,984.9
35.2%
23.3%
10.9%
85.9%
Company E
Company B
4
5
Hong Kong, China
Taiwan, China
201.0
129.8
8.7%
5.6%
The Company6 Beijing, China 50.0 2.2%
Source: Frost & Sullivan, Annual Reports
Niche DRAM
In 2024, the global niche DRAM market was highly concentrated among leading overseas
suppliers, with the top three companies collectively capturing approximately 69.1% of the total
market value. The Company achieved revenues of around USD146.4 million that year
equivalent to roughly 1.7% market share securing the No. 7 position worldwide and standing
out as the second-ranked mainland Chinese company. Besides the Company, the key market
players in niche DRAM segment include Samsung Electronics Co., Ltd., Micron Technology,
Inc. and SK Hynix Inc..
Ranking of Niche DRAM Market (Revenue), Global, 2024
Ranking Company Name Location Niche DRAM Revenue
(USD Million) Market Share (%)
1 Company F
Company D
Company G
2
3
Suwon, South Korea
Boise, United States
Seoul, South Korea
2,622.4
1,805.0
1,455.9
30.8%
21.2%
17.1%
Top 7 7,602.4 89.3%
Company H
Company A
4
5
Taiwan, China
Taiwan, China
737.3
605.4
8.7%
7.1%
Company I6 Beijing, China 229.9 2.7%
The Company7 Beijing, China 146.4 1.7%
Source: Frost & Sullivan, Annual Reports
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MCU
In 2024, the competitive landscape of the global MCU market is characterized by relative
stability and high concentration, with the top five companies together accounting for
approximately 81.2% of the total market size. Among them, the Company’s revenue in 2024
will be approximately USD230.6 million, with a market share of approximately 1.2%, ranking
eighth among global companies and the highest-ranking mainland Chinese company. Besides
the Company, the key market players in MCU segment include Infineon Technologies AG,
Renesas Electronics Corporation and STMicroelectronics N.V ..
Ranking of MCU Market (Revenue), Global, 2024
Ranking Company Name Location MCU Revenue
(USD Million) Market Share (%)
1 Company J
Company K
Company L
2
3
Neubiberg, Germany
Tokyo, Japan
Geneva, Switzerland
3,991.8
3,467.1
3,337.7
20.2%
17.5%
16.9%
Top 8 18,030.8 91.2%
Company M
Company N
4
5
Eindhoven, Netherlands
Chandler, United States
3,102.4
2,150.3
15.7%
10.9%
Company O6 Dallas, United States 1,461.8 7.4%
Company P7 Taiwan, China 289.0 1.5%
The Company8 Beijing, China 230.6 1.2%
Source: Frost & Sullivan, Annual Reports
Notes:
1. Company A is a listed company, founded in 1987 and headquartered in Taiwan, China, is a service provider
dedicated to offering comprehensive IC products and solutions to global customers.
2. Company B is a listed company, founded in 1989 and headquartered in Taiwan, China, is a leading global
non-volatile memory IDM, providing ROM, NOR Flash, and NAND Flash solutions across a wide range of
specifications and capacities.
3. Company C is a listed company, founded in 2017 and headquartered in Tokyo, Japan, is one of the global
leaders in memory solutions, dedicated to the development, production and sales of flash memory and SSDs.
4. Company D is a listed company, founded in 1978 and headquartered in Boise, USA, is a global leader in
innovative memory solutions, delivering optimal memory and storage systems for a broad range of
applications.
5. Company E is an unlisted company, founded in 2019 and headquartered in Hong Kong, China, is a technology
leader that designs, develops, and markets high performance non-volatile Flash memory products for the
following key markets: automotive, communications, digital consumer, industrial and medical.
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6. Company F is a listed company, founded in 1969 and headquartered in Suwon, South Korea, covers consumer
electronics and IT & mobile communications businesses, manufacturing electronic components such as
semiconductors, display parts, memory, image sensors, and camera modules.
7. Company G is a listed company, founded in 1983 and headquartered in Seoul, South Korea, is a global leading
semiconductor supplier of DRAM, NAND Flash, and CMOS Image Sensors to a wide range of distinguished
customers worldwide.
8. Company H is a listed company, founded in 1995 and headquartered in Taiwan, China, has long been
committed to the R&D, design, manufacturing and sales of DRAM, with technological innovation as the
cornerstone of its growth.
9. Company I is a listed company, founded in 2005 and headquartered in Beijing, China, is primarily engaged in
the R&D and sales of IC products.
10. Company J is a listed company, founded in 1999 and headquartered in Neubiberg, Germany. It dominates
power semiconductors and automotive electronics for industrial IoT, renewable energy, and secure connectivity
solutions.
11. Company K is a listed company, founded in 2003 and headquartered in Tokyo, Japan. It focuses on MCU,
embedded processors, and analog chips for industrial automation and automotive control systems.
12. Company L is a listed company, founded in 1987 and headquartered in Geneva, Switzerland. It specializes in
MEMS sensors, automotive MCU, and power management ICs for ADAS, industrial robotics, and edge
computing, etc.
13. Company M is a listed company, founded in 2006 and headquartered in Eindhoven, Netherlands. It is primarily
engaged in the design, manufacture, and sale of ICs and discrete devices. Its products are mainly used in the
automotive, industrial and IoT mobile devices, and communication infrastructure sectors.
14. Company N is a listed company, founded in 1989 and headquartered in Chandler, USA. It delivers MCU,
analog ICs, and FPGA solutions for automotive, aerospace, and industrial control applications.
15. Company O is a listed company, founded in 1930 and headquartered in Dallas, USA. It specializes in analog
and embedded processing chips for automotive, industrial automation, and consumer electronics.
16. Company P is a listed company, founded in 2008 and headquartered in Taiwan, China. It offers industrial-grade
MCU, battery management IC, and audio processors for smart home, power tools, and IoT edge devices.
Others
In 2024, China’s fingerprint chip industry exhibits a relatively concentrated competitive
landscape. The Company generated USD50.4 million in revenue in the fingerprint chip sector,
ranking second in the market.
Entry Barriers of Global Semiconductor Industry
 R&D Innovation & Product-Development Capability Barriers
Chip design industry is a typical technology-intensive industry. Chip enterprises need to
have forward-looking industry judgment, define product specifications in advance, and grasp
the direction of technological evolution. The chip design process involves multidisciplinary
collaboration and requires coordination of complex links such as circuit design, architecture
design, system integration, software and hardware collaboration, and verification testing,
which places extremely high requirements on the capabilities of the R&D team. Chip
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development has a long cycle and high verification costs, requiring continuous iteration and
deep technological accumulation. Especially in brand consumer electronics and high-reliability
fields such as automotive and industrial control, the product development error tolerance rate
is extremely low, which raises the entry barrier. For example, SLC NAND Flash is widely used
in network devices, smart security systems, industrial control, and automotive applications,
where high standards are placed on write stability and power-down data protection. To meet
these requirements, the chip must incorporate multi-level voltage write control and error
correction algorithms during the circuit design stage. The development process involves
repeated verification of endurance and data retention under extreme voltage and temperature
conditions, significantly increasing the complexity of product definition, design, and
validation.
 Customer & Brand Barriers
Chips are the cornerstone of electronic devices, and their reliability and stability directly
determine the performance and competitiveness of end products. Major downstream customers
in the industry typically maintain long-term and stable cooperation with existing chip
suppliers, with both sides having strict requirements and a high degree of tacit understanding
regarding product quality, delivery, and service processes. For example, niche DRAM used in
industrial applications (such as industrial automation, energy storage and battery management)
must undergo long-term compatibility and stability testing by customers, making it difficult for
new entrants to break existing suppliers’ entrenched positions in the early stages. Existing chip
suppliers have established a good brand image in long-term market competition, and new
companies face significant challenges in winning customer trust, building channels, and
obtaining orders.
 Quality-Control Capability Barriers
In the chip design process, quality is reflected not only in functional correctness but also
in product consistency, reliability, and stable performance across multiple scenarios. Mature
enterprises ensure that products meet high-standard quality requirements before mass
production by building a full-process quality verification system, from front-end architecture
design and post-simulation verification to collaborative optimization in the packaging and
testing stages. For example, automotive-grade NOR Flash is commonly used in critical systems
such as instrument clusters and ADAS. These chips must pass AEC-Q100 certification and
demonstrate long-term operational stability under extreme conditions such as high temperature,
humidity, and vibration. As a result, they are subject to stringent requirements for product
consistency, reliability, and comprehensive quality validation throughout the manufacturing
process. At the same time, leading enterprises have established testing specifications and
reliability evaluation mechanisms covering multiple product lines based on long-term
technological accumulation, ensuring that chips can maintain high-performance stability and
long-term operation reliability in multiple application scenarios. Without a large amount of
verification data, patent support, and customer-side collaboration mechanisms, new entrants
find it difficult to establish an equivalent quality assurance system in the short term.
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 Supply-Chain Barriers
Chip design enterprises need to have the ability to coordinate and manage key processes
such as wafer foundry and packaging/testing to ensure smooth mass production and stable
delivery of products. Leading enterprises have formed deep cooperation mechanisms with
multiple upstream and downstream entities through long-term accumulation, possessing higher
collaboration efficiency and resource allocation capabilities to effectively guarantee product
quality and delivery schedule stability. By establishing a full-process supply chain management
system covering design, verification, tape-out, testing, and delivery, leading manufacturers can
quickly respond to customer needs, enhance supply chain resilience, and ensure business
continuity. For example, NOR Flash is commonly used in scenarios with high requirements for
boot speed and data accuracy, and downstream customers generally focus on stable delivery
and verification compatibility, so chip design enterprises need to maintain long-term
cooperation with manufacturers that have mature production lines and reliable delivery
capabilities. Due to limited business scale and insufficient customer stickiness, new entrants
often struggle to establish supply chain response systems and delivery capabilities at the same
level in the early stages.
 Talent Barriers
The semiconductor industry heavily relies on multidisciplinary talents with extensive
experience, particularly in critical areas such as front-end chip design, quality verification, and
reliability testing. These roles have high technical barriers and long cultivation cycles.
Currently, the global supply of senior chip design and quality engineering professionals is
tight, a large proportion of key technical experts are concentrated within leading companies.
New entrants face significant challenges in attracting senior engineers with complete project
experience and quickly building comprehensive technical teams spanning design, verification,
and delivery, which severely limits product development efficiency and project execution
capability. For example, key modules in SLC NAND Flash design such as power-loss data
protection, voltage regulation, and lifespan management are often developed and optimized by
veteran engineers with over a decade of experience. This talent concentration among industry
leaders further raises the entry barriers for newcomers.
SOURCE OF INFORMATION
We commissioned Frost & Sullivan to conduct market research on the semiconductor
industry and prepare the Frost & Sullivan Report. Frost & Sullivan is an independent global
consulting firm founded in 1961 in New Y ork that offers industry research and market
strategies. We have contracted to pay RMB450,000 to Frost & Sullivan for compiling the Frost
& Sullivan Report. In preparing the Frost & Sullivan Report, Frost & Sullivan conducted
detailed primary research which involved discussing the status of the industry with certain
leading industry participants and conducting interviews with relevant parties. Frost & Sullivan
also conducted secondary research which involved reviewing company reports, independent
research reports and data based on its own research database. Frost & Sullivan obtained the
figures for the estimated total market size from historical data analysis plotted against
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macroeconomic data as well as considered the above-mentioned industry key drivers. Its
market engineering forecasting methodology integrates several forecasting techniques with the
market engineering measurement-based system and relies on the expertise of the analyst team
in integrating the critical market elements investigated during the research phase of the project.
These elements primarily include expert-opinion forecasting methodology, integration of
market drivers and restraints, integration with the market challenges, integration of the market
engineering measurement trends and integration of econometric variables.
The Frost & Sullivan Report is compiled based on the following assumptions: (i) the
social, economic and political environment of the globe and the PRC is likely to remain stable
in the forecast period; and (ii) related industry key drivers are likely to drive the market in the
forecast period.
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REGULATORY ENVIRONMENT IN THE PRC
Overview
We are a company established in the PRC that engages in the research and development,
technical support and sales of memory, microcontrollers and sensors. Our business activities in
the PRC are supervised and managed by the MIIT and other departments and industry
self-regulatory organisations, while related businesses are regulated by the current laws,
regulations, rules and other regulatory documents of the PRC. The following sets forth a
summary of the major laws and regulations applicable to our business, including industry
access, business supervision, corporate governance and risk control, as well as other necessary
general regulations, including foreign exchange, taxation, and foreign investment access,
rather than a detailed description of all the laws and regulations which we are required to
comply with.
Major Regulators
Our implementation of business activities within the industry are mainly supervised and
managed by the MIIT. The MIIT is responsible for the national industrialisation and
informatisation, formulating and organising the implementation of industrial planning,
industrial policies and standards, monitoring the daily operation of the industries, and
promoting the development and independent innovation of major technology.
Regulations and Policies on the IC Industry
In June 2014, the State Council promulgated the Outline for Promoting the Development
of the National Integrated Circuit Industry (), which
stated that the development goal of the integrated circuit industry is to reach an advanced
international standard in the major links of the integrated circuit industry chain by 2030, with
a number of enterprises entering the international first tier and achieving leapfrog
development. One of the main tasks and development priorities are to focus on the
development of integrated circuit design industry when strengthening collaborative innovation
in integrated circuit design, software development, system integration, content and services
based on the industrial chain in key areas so as to drive the manufacturing industry developing
with the rapid growth of the design industry.
In January 2017, the National Development and Reform Commission (“NDRC”) issued
the Guiding Catalogue of Key Products and Services in Strategic Emerging Industries (2016
Edition) (ኬͦ፽ (2016و)), which clarifies eight
industries in five major areas, which are further subdivided into 174 sub-directions under 40
key directions and nearly 4,000 subdivided products and services. Among them, integrated
circuit chip products primarily include CPU, MCU, memory, digital signal processor,
embedded CPU, communication chip, digital TV chip, multimedia chip, information security
and video surveillance chip, smart card chip, automotive electronic chip, industrial control
chip, smart grid chip, MEMS sensor chip, power control circuit and semiconductor power
electronic devices, and optoelectronic hybrid integrated circuit.
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In November 2017, the State Council promulgated the Guiding Opinions of the State
Council on Deepening “Internet + Advanced Manufacturing” and Developing Industrial
Internet (ଉʷ“ʝᑌၣ+΋ආႡிุ”ኬจԈ). The
Guiding Opinions encourage domestic and foreign enterprises to cooperate in tackling
technical problems for weak links such as big data analysis, industrial data modelling, key
software systems, and chips; it is recommended to implement relevant preferential tax policies,
promote preferential enterprise income tax for software and integrated circuit industries, and
encourage relevant enterprises to accelerate the development and application of industrial
Internet.
In July 2020, the State Council announced Several Policies to Promote the High-quality
Development of the IC Industry and the Software Sectors in the New Era (ආණϓ
ഄ), in order to further optimize the development
environment of the integrated circuit industry and software sectors, deepen international
cooperation in the industry, and enhance the industrial innovation capability and development
quality, launch a series of supporting fiscal and taxation, investment and financing, research
and development, import and export, talents, intellectual property rights, market application
and international cooperation policies.
The NPC promulgated the Outline of the 14th Five-Y ear Plan for National Economic and
Social Development and the Long-Range Objectives through the Y ear 2035 of the PRC ( ʕ
ʞϋ஝ྌձ2035) on 11 March
2021, proposing to foster advanced manufacturing clusters and promote industrial innovation
and development of industries including integrated circuits. In December 2021, the State
Council promulgated the Circular of “14th Five-Y ear Plan” for the Development of Digital
Economy ( “ɤ̬ʞ”), which clarified that during the “14th
Five-Y ear Plan” period, the promotion of digital industrialization should be accelerated to
make up for key technical shortcomings. Optimizing and innovating organizational methods
such as “selecting the best candidates via open competition mechanism”, focusing on
breakthroughs in key core technologies in the fields of high-end chips, operating systems,
industrial software, core algorithms and frameworks, and strengthening the integrated research
and development of general-purpose processors, cloud computing systems, and key software
technologies. In addition, the competitiveness of key links in the industrial chain should be
improved, and the supply chain systems of key industries such as 5G, integrated circuits, new
energy vehicles, artificial intelligence, and industrial Internet should be improved.
In December 2023, the NDRC promulgated the “Industrial Structure Adjustment
Guidance Catalogue (2024 Edition)” (ኬͦ፽(2024 ϋ͉)), which stated
integrated circuits was categorized as information industry, the 28th in the first category of
Encouragement Catalogue. The national standard industry of main business of the Company is
integrated circuit design (I6520), which was categorized as the first category and the
Encouraged Project of the Catalogue.
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In March 2025, the NPC reviewed and approved the Report on the Implementation of the
Central and Local Budgets for 2024 and Draft Central and Local Budgets for 2025 (׵
2024ၾ2025జѓ), which resolved to
support the construction of a modern industrial system, accelerate industrial transformation and
upgrading, vigorously promote new industrialization, strengthen support for scientific and
technological innovation in the manufacturing sector, and promote the integrated development
of scientific and technological innovation and industrial innovation. The central finance special
funds will be RMB11.878 billion for the manufacturing sector, increasing by 14.5%, to
promote high-quality development of key areas of the manufacturing industry and enhance the
resilience and security of the industry chain supply chain.
Regulations Related to Foreign Investment in the PRC
Regulations on Corporation
On 29 December 1993, the SCNPC issued the PRC Company Law, which was recently
amended by the SCNPC on 29 December 2023, and came into force on 1 July 2024. All
companies established in the PRC are subject to the PRC Company Law. The PRC Company
Law regulates the establishment, operation, corporate structure, and management of corporate
entities in China and classifies companies into limited liability companies and limited
companies by shares. Such regulations also apply to foreign-invested enterprises established in
the PRC.
Foreign Investment Regulation
In March 2019, the NPC promulgated the Foreign Investment Law of the People’s
Republic of China (), which came into effect on 1 January
2020. Pursuant to the Foreign Investment Law of the People’s Republic of China, “foreign
investment” refers to investment activities directly or indirectly conducted by one or more
natural persons, business entities, or otherwise organizations of a foreign country within China,
or foreign investors, and the investment activities include the following situations: (1) a foreign
investor, individually or collectively with other investors, establishes the foreign-invested
enterprise in China; (2) a foreign investor acquires stock shares, equity shares, shares in assets,
or other similar rights and interests of an enterprise within China; (3) a foreign investor,
individually or collectively with other investors, invests in a new project in China; and (4)
investments in other means as provided by laws, administrative regulations, or the State
Council.
In addition, the Foreign Investment Law of the People’s Republic of China also provides
several protective rules and principles for foreign investors and their investments in China,
including, among others, that local governments must abide by their commitments to the
foreign investors; foreign-invested enterprises are allowed to issue stocks and corporate bonds;
expropriation or requisition of the investment of foreign investors is prohibited except for
special circumstances, in which case statutory procedures must be followed and fair and
reasonable compensation must be made in a timely manner; mandatory technology transfer is
prohibited; and the capital contributions, profits, capital gains, proceeds out of asset disposal,
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licensing fees of intellectual property rights, indemnity or compensation legally obtained, or
proceeds received upon settlement by foreign investors in China may be freely remitted inward
and outward in Renminbi or foreign currencies. Also, foreign investors or FIEs should be
imposed legal liabilities for failing to report investment information in accordance with the
requirements.
Foreign Investment Access
According to the Foreign Investment Law of the People’s Republic of China, the State
Council will publish or approve to publish a catalogue for special administrative measures, or
the “negative list.” The Foreign Investment Law of the People’s Republic of China grants
national treatment to foreign invested entities, except for those foreign invested entities that
operate in industries deemed to be either “restricted” or “prohibited” in the “negative list.” The
Foreign Investment Law of the People’s Republic of China provides that foreign invested
enterprises operating in foreign restricted or prohibited industries will require market entry
clearance and other approvals from relevant PRC governmental authorities. On 26 December
2019, the State Council has promulgated the Regulations on Implementing the Foreign
Investment Law of the People’s Republic of China (ૢ
Է), which came into effect on 1 January 2020, further stipulates that the State shall
formulate the Catalogue of Encouraged Foreign Investment Industries in accordance with
national economic and social development needs, setting out specific industries, fields and
regions to encourage and guide investments by foreign investors.
Foreign investment activities in the PRC are mainly governed by the Special
Administrative Measures (Negative List) for the Access of Foreign Investment (ࡘ
݄(૶ఊ)) and the Catalogue of Industries for Encouraging Foreign
Investment ( ོᎸ̮ਠҳ༟ପุͦ፽), which were promulgated and amended from time to
time jointly by the Ministry of Commerce of the PRC (“MOFCOM”) and the NDRC. The
Negative List and the Encouraging Catalogue divide industries into three categories in terms
of foreign investment, namely, “encouraged”, “restricted” and “prohibited”.
The currently effective Negative List is the Special Administrative Measures (Negative
List) for the Access of Foreign Investment (2024 V ersion) (݄(ࠋ
૶ఊ)(2024و)), issued on 6 September 2024 by the MOFCOM and NDRC and
implemented since 1 November 2024. Domestic enterprises engaging in businesses in the areas
of investment prohibited by the Negative List for the Access of Foreign Investment that issue
shares abroad and list them for trading shall be subject to the examination and consent of the
relevant competent state authorities. Foreign investors shall not participate in the operation and
management of the enterprise, and the proportion of their shareholding shall be implemented
with reference to the relevant provisions on the management of domestic securities investment
by foreign investors. In addition, the MOFCOM and the NDRC jointly promulgated the
Encouraged Industry Catalogue for Foreign Investment (2022 version) ( ོᎸ̮ਠҳ༟ପุͦ
፽(2022و)) on 26 October 2022, which came into effect from 1 January 2023. According
to the above lists and catalogues, investment in integrated circuit design does not fall into the
restricted or prohibited category of industries for foreign investment.
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Security Review of Foreign Investment
According to the Measures on the Security Review of Foreign Investment ( ̮ਠҳ༟τ
) jointly promulgated by the NDRC and the MOFCOM in December 2020,
effective from 18 January 2021, foreign investment that affects or may affect national security
shall be subject to security review in accordance with the provisions of such Measures. For
foreign investment within the following scope, foreign investors or relevant domestic parties
(hereinafter as parties) shall take the initiative to make a declaration on their investments for
security review to the Office of the Working Mechanism prior to (i) making investments in the
military industry, military industrial support and other fields relating to the security of national
defence, and investments in areas surrounding military facilities and military industry
facilities; and (ii) obtaining actual control over enterprises involved in important agricultural
products, important energy and resources, important equipment manufacturing, important
infrastructure, important transport services, important cultural products and services, important
information technologies and internet products and services, important financial services, key
technologies and other important fields relating to national security.
Regulations on Cybersecurity, Data Security and Privacy Protection
We are subject to certain requirements on cybersecurity, data security and privacy
protection, as we are operating websites, as well as collect, store and process business,
management and transaction data in the PRC during our business operations.
Network Security
In November 2016, the SCNPC promulgated the Cyber Security Law of the People’s
Republic of China () (“the Cyber Security Law”), which took
effect since 1 June 2017 and was last amended on 28 October 2025, and will take effect on 1
January 2026. The Cyber Security Law requires that network operators, including network
service providers, shall take technical measures and other necessary measures in accordance
with applicable laws and regulations and the compulsory requirements of the national and
industrial standards to safeguard the safe and stable operation of its networks. The Cyber
Security Law further requires network service providers to formulate contingency plans for
network security incidents, report to the competent departments upon the occurrence of any
incident endangering cyber security and take corresponding remedial measures according to
requirements. Network operators are also required to maintain the integrity, confidentiality and
availability of network data. The Cyber Security Law reaffirms the basic principles and
requirements specified in other existing laws and regulations on personal data protection, such
as the requirements on the collection, use, processing, storage and disclosure of personal data,
and network operators being required to take technical and other necessary measures to ensure
the security of the personal information they have collected and prevent the personal
information from being divulged, damaged or lost. Any violation of the Cyber Security Law
may subject the network services providers to warnings, fines, confiscation of illegal gains,
revocation of licenses, cancellation of filings, shutdown of websites or criminal liabilities.
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Pursuant to the Cybersecurity Review Measures () jointly issued
by authorities including the CAC on 28 December 2021, which took effect from 15 February
2022, critical information infrastructure operators that procure internet products and services,
and network platform operators engaging in data processing activities, must be subject to the
cybersecurity review if their activities affect or may affect national security. The measures
further elaborate that conducting the cybersecurity review shall focus on the assessment of a
number of national security risk factors of the relevant object or situation, including: the
potential risks of core data, important data, or a large amount of personal information being
stolen, leaked, destroyed, illegally used or exported overseas; and the risks of critical
information infrastructure, core data, important data, or the risk of a large amount of personal
information being influenced, controlled or maliciously used by foreign governments after
going public, and cyber information security risk.
Data Security
Pursuant to the provisions of the Data Security Law of the People’s Republic of China
(), which was promulgated on 10 June 2021 and took effect on
1 September 2021, a data classification and layered protection system has been implemented
based on the importance of data in the development of economy and society and the degree of
impact on national security, public interests or legitimate rights and interests of individuals or
organizations when such data is tampered with, destroyed, leaked or illegally acquired or used.
The Data Security Law also provides a national security review system for those data
processing activities that affect or may affect national security.
The Administration Regulations on Network Data Security ( ၣഖᅰኽτΌ၍ଣૢԷ)
(“Network Data Regulations”), which was promulgated on 24 September 2024 and took effect
from 1 January 2025, mainly focus on personal information protection, ensuring the security
of important data, establishing an efficient, convenient and secure cross-border data flow
system, and regulating network platform service providers. Regarding personal information
protection, the Network Data Regulations refine the provisions of the Personal Information
Protection Law of the People’s Republic of China ()o n
notification, consent, and individual exercise of rights. To ensure the security of important
data, the Network Data Regulations clarify the requirements for the formulation of important
data catalogues and the obligations of network data processors to identify and report important
data, stipulate the obligations of network data security managers and management agencies,
and provide for risk assessment scenarios and assessment contents of important data. Targeting
to establish an efficient, convenient and safe cross-border data flow system, the Network Data
Regulations further optimise the cross-border data flow system based on the experience of
formulating and implementing departmental regulations including the Measures for the
Security Assessment of Outbound Data Transfer (), the Measures
for the Standard Contract for the Outbound Transfer of Personal Information (̈ྤ
), and the Regulations on Promoting and Regulating Cross-border Data Flows
().
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Regulations on Land and Real Estate
Land Assignment
Under the Interim Regulations on Assignment and Transfer of the Rights to the Use of the
State-Owned Urban Land of the People’s Republic of China (ᕄ਷Ϟɺή
Դ͜ᛆ̈ᜫձᔷᜫᅲБૢԷ), promulgated by the State Council on 19 May 1990 and
amended on November 29, 2020, a system of assignment and transfer of the right to use
state-owned land was adopted. A land user must pay land premium to the state as consideration
for the assignment of the right to use a land site within a certain term, and the land user who
obtained the right to use the land may transfer, lease out, mortgage or otherwise exploit the
land for economic activities within the term of use. Under these Regulations and the Urban
Real Estate Administration Law of the People’s Republic of China (ג
), the local land administration authority may enter into an assignment contract
with the land user for the assignment of land use rights. The land user is required to pay the
land premium as provided in the assignment contract. After the full payment of the land
premium, the land user must register with the land administration authority and obtain a land
use rights certificate which evidences the acquisition of land use rights.
Leasing Properties
According to the Civil Code of the People’s Republic of China (ج
Պ), an owner of immovable or movable property is entitled to possession, use, earnings, and
disposal of such property in accordance with the law. Subject to the consent of the lessor, the
lessee may sublease the leased premises to a third party. Where a lessee subleases the premises,
the lease contract between the lessee and the lessor remains valid. The lessor is entitled to
terminate the lease if the lessee subleases the premises without the consent of the lessor. In
addition, if the ownership of the leased premises changes during the lessee’s possession in
accordance with the terms of the lease contract, the validity of the lease contract shall not be
affected. Moreover, pursuant to the Civil Code of the People’s Republic of China, if the
mortgaged property has been leased and transferred for occupation prior to the establishment
of the mortgage right, the original tenancy shall not be affected by such mortgage right.
Pursuant to the Administrative Measures on Leasing of Commodity Housing (܊גۜ
) promulgated by the Ministry of Housing and Urban-Rural Development on
1 December 2010 and became effective on 1 February 2011, the lessor and the lessee are
required to complete property leasing registration and filing formalities within 30 days from
execution of the property lease contract with the development (real estate) authorities of the
People’s Government of the special municipality, municipality or county where the leased
property is located. If a company fails to complete such procedures, a fine ranging from
RMB1,000 to RMB10,000 may be imposed on each lease agreement.
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Regulations on Intellectual Property
Patent
According to the Patent Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷ਖ਼л
), taking effect on 1 June 2021 and the Implementation Regulation for the Patent Law of
the People’s Republic of China (), taking effect on 20
January 2024, the patent administrative department under the State Council is responsible for
administering patents in the PRC, while the patent administration departments of the
governments at the provincial level, autonomous regions and municipalities directly under the
Central Government are responsible for the patent administration within their respective
administrative regions. The PRC patent system adopts a “first to file” principle, which means
that where more than two persons file a patent application for the same invention, a patent will
be granted to the person who filed the application first. A patent is valid for twenty years in
the case of an invention, ten years in the case of utility models and fifteen years in the case
of designs, starting from the application date. Following the grant of patent rights for an
invention or a utility model, unless otherwise stipulated in the Patent Law, no organization or
individual shall implement the patent without licensing from the patentee, i.e. shall not
manufacture, use, offer to sell, sell or import such patented products for manufacturing and
business purposes, or use the patented method and use, offer to sell, sell or import products
obtained directly according to the patented method. Following the grant of design patent rights,
no organization or individual shall implement the patent without licensing from the patentee,
i.e. shall not manufacture, offer to sell, sell or import the design patented products for
manufacturing and business purposes.
Copyright
Pursuant to the Copyright Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷ഹ
) (the “Copyright Law”) promulgated by the SCNPC on 7 September 1990 and
amended in 2001, 2010 and 2020 and Regulations for Implementation of Copyright Law of the
People’s Republic of China (ૢԷ) published on 30 May
1991 and amended in 2002, 2011 and 2013, Chinese citizens, legal persons or unincorporated
organizations shall, whether published or not, enjoy copyright in their works, which include
works of literature, art, natural science, social science, engineering technology and computer
software. The copyrights include personal rights such as the right of publication and that of
attribution as well as property rights such as the right of reproduction and that of distribution.
The scope of copyright protection was extended to internet activities, products disseminated
over the internet and software products. Unless otherwise provided in the Copyright Law,
reproducing, distributing, performing, projecting, broadcasting or compiling a work or
communicating the same to the public via an information network without permission from the
owner of the copyright therein shall constitute infringements of copyrights. The infringer shall
undertake to cease the infringement, eliminate impact, and offer an apology, pay damages and
other civil liabilities. In addition, pursuant to the provisions of the Copyright Law, authors and
other copyright owners may complete the registration of their works with a registration agency
recognised by the State copyright authority.
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Pursuant to the Regulations on Protection of Computer Software (ᚐૢ
Է) promulgated by the State Council on 4 June 1991 and most recently amended on 30
January 2013 and implemented on 1 March 2013, computer software to be protected under such
Regulations must be independently developed by developers and has been fixed on certain
tangible objects. Chinese residents, legal entities or other organizations shall be entitled to the
copyright of the software they developed, whether published or not, in accordance with such
Regulations. Software copyright commences from the date on which the development of the
software is completed. The protection period for software copyright of a legal person shall be
50 years, concluding on 31 December of the 50th year after the software’s initial release. But
if the software has not been released within 50 years from the date on which the software
development is completed, it shall no longer receive the protection of these Regulations. A
software copyright owner may register with the software registration institution recognized by
the copyright administration department of the State Council.
Pursuant to the Measures for the Registration of Computer Software Copyright (ၑ
) released and implemented by the National Copyright
Administration on 20 February 2002 (partially amended in 2004), the applicant for the
registration of software copyright shall be the copyright owner of the said software and the
natural person, legal person or other organisation that inherits, acquires or receives the
software copyright. The National Copyright Administration shall be the competent
governmental authority for the nationwide administration of software copyright registration
and designates the China Copyright Protection Centre as the software registration authority.
Trademark Rights
According to the Trademark Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷
), which was promulgated by the SCNPC on 23 August 1982, last amended on 23
April 2019 with effect from 1 November 2019, as well as the Implementation Regulation of the
People’s Republic of China Trademark Law (ૢԷ) adopted by
the State Council on 3 August 2002, and was revised on 29 April 2014 with effect from 1 May
2014, registered trademarks in the PRC include commodity trademarks, service trademarks,
collective trademarks, and certification marks.
The PRC Trademark Office of China National Intellectual Property Administration
(CNIPA) is responsible for the registration and administration of trademarks throughout the
PRC and grants a term of 10 years to registered trademarks. Trademarks are renewable every
10 years when a registered trademark needs to be used after the expiration of its validity term.
A trademark registrant may license its registered trademark to another party by entering into
a trademark licensing agreement. Trademark licensing agreements must be filed with the
Trademark Office. The licensor shall supervise the quality of the commodities on which the
trademark is used, and the licensee shall guarantee the quality of such commodities. The
trademark registration in the PRC follows a first-come principle. Where a trademark for which
a registration application has been made is identical or similar to another trademark which has
already been registered or been subject to a preliminary examination and approval for use on
the same kind of or similar commodities or services, the application for registration of such
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trademark may be rejected. Applying for the registration of a trademark may not prejudice the
existing right first obtained by others, nor may any person register in advance a trademark that
has already been used by another party and has already gained a sufficient degree of reputation
through such party’s use. Using a trademark that is identical with or similar to a registered
trademark in connection with the same or similar goods without the authorization of the owner
of the registered trademark constitutes an infringement of the exclusive right to use a registered
trademark. The infringer shall, in accordance with the regulations, undertake to cease the
infringement, take remedial action, and pay damages.
Domain Names
Pursuant to the Measures on Administration of Internet Domain Names ( ʝᑌၣਹΤ၍
) promulgated by the MIIT on 24 August 2017 and came into effect on 1 November
2017, the MIIT shall be responsible for managing internet domain name in the PRC. The
first-come principle is implemented for domain name registration services where the
corresponding detailed rules for domain name registration stipulate otherwise, such provisions
shall prevail. Domain name registrations are handled through domain name service agencies
established under the relevant regulations, and the applicants become domain name holders
upon successful registration.
Design of Integrated Circuit Layouts
Pursuant to the Regulations on the Protection of Integrated Circuit Layout Designs ( ණ
ᚐૢԷ(the “Regulations on the Protection”) promulgated by the State
Council on 2 April 2001 and came into effect on 1 October 2001, and the Detailed
Implementing Rules of the Regulations on the Protection of Layout Designs of Integrated
Circuits () promulgated by the CNIPA on 18
September 2001 and came into effect on 1 October 2001, the owner of an integrated circuit
layout design has exclusive rights to the design. The exclusive rights to the layout design arise
upon registration with the intellectual property administration department of the State Council,
and layout designs that have not been registered are not protected by laws. The protection
period for the exclusive rights of integrated circuit layout designs is 10 years, calculated from
the date of the design registration application or the first date of commercial use anywhere in
the world, whichever is earlier. However, a layout-design is no longer protected under
exclusive rights 15 years after its creation, regardless of registration or commercial use.
Regulations on Foreign Exchange Supervision
Pursuant to the principal regulations governing foreign currency exchange in PRC are the
Administrative Regulations for Foreign Exchange of the People’s Republic of China ( ʕശ
ɛ͏΍ձ਷̮ි၍ଣૢԷ), which was promulgated by the State Council on 29 January 1996
and last amended and became effective on 5 August 2008, the foreign exchange management
matters in the PRC may be divided into current items (including trade-related receipts and
payments, and interest and dividend payments) and capital items (including direct equity
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investment, loans and divestment). Current or capital account funds can only be remitted in or
out through the relevant procedures of the foreign exchange (including settlement or purchase)
after obtaining the necessary permissions and reasonable review.
On 11 May 2013, the SAFE promulgated the Provisions on Foreign Exchange Control on
Direct Investments in China by Foreign Investors (ટҳ༟̮ි၍ଣ஝
) which came into effect on 13 May 2013, and was revised on 10 October 2018 and
partially invalid on 30 December 2019. According to such provisions, the administration by
SAFE or its local branches over direct investment by foreign investors in the PRC shall be
conducted by way of registration and banks shall process foreign exchange business relating
to the direct investment in the PRC based on the registration information provided by SAFE
and its branches.
On 26 December 2014, the SAFE issued and implemented the Notice on Issues
Concerning the Foreign Exchange Administration of Overseas Listing (ྤ̮ɪ̹̮ි၍
). According to the Notice, a domestic company shall, within 15 business
days from the date of completion of its overseas listing issuance, register the overseas listing
with the foreign exchange control bureau located at its registered address; after a domestic
company gets listed overseas, if any of its domestic shareholders intends to increase or
decrease overseas shares, the domestic shareholder shall handle overseas shareholding
registration formalities with the local foreign exchange authority within twenty working days
prior to the intended share increase or decrease.
On 23 October 2019, the SAFE promulgated and implemented the Notice for Further
Advancing the Facilitation of Cross-border Trade and Investment (׸
), among which, Paragraph 2 of Article 8 took effect on 1 January 2020
and was partially revised on 4 December 2023. Pursuant to the Notice, foreign-invested
enterprises engaged in non-investment business are permitted to use capital funds for domestic
equity investment in accordance with the laws on the condition that the current Special
Administrative Measures for Access of Foreign Investment (Negative List) are not violated and
the relevant domestic investment projects are genuine and in compliance with laws; restrictions
on the use of funds for foreign exchange settlement of domestic accounts for the realization of
assets have been removed and restrictions on the use and foreign exchange settlement of
foreign investors’ security deposits have been relaxed; eligible enterprises in the pilot area are
also allowed to use revenues under capital accounts, such as capital funds, foreign debts and
overseas listing revenues for domestic payments without providing materials to the bank in
advance for authenticity verification on an item by item basis, while the use of funds should
be true, in compliance with applicable rules and conforming to the current capital revenue
management regulations.
On 10 April 2020, the SAFE issued and implemented the Notice on Optimizing
Administration of Foreign Exchange to Support the Development of Foreign-related Business
(), which stipulates that eligible enterprises
are allowed to make domestic payments by using their capital, foreign credits and the income
under capital accounts of overseas listing, with no need to provide the evidentiary materials
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concerning authenticity of such capital for banks in advance, provided that their capital use
shall be authentic and in line with provisions, and conform to the prevailing administrative
regulations on the use of income under capital accounts.
On 4 December 2023, the SAFE issued and implemented the Notice on Further Deepening
Reforms to Promote the Facilitation of Trade and Investment (ආ༨ྤ
), which provides that the equity transfer consideration funds in
foreign currency received by a domestic equity transferor (including institutions and
individuals) from domestic parties, as well as the foreign exchange funds raised by domestic
enterprises through overseas listing, may be directly remitted to the settlement account of
capital accounts. Funds in the settlement account of capital accounts may be settled and used
at discretion.
On 3 April 2024, the SAFE promulgated the Capital Account Foreign Exchange
Operational Guidelines (2024 version) (ˏ(2024و)), which came
into effect on 6 May 2024, stipulates that the funds raised by the domestic companies through
overseas listing shall be repatriated to the PRC in principle and may be in RMB or foreign
currency.
Regulations on Foreign Direct Investment
Pursuant to the Provisions on the Foreign Exchange Administration of the Overseas
Direct Investment of Domestic Institutions ()
promulgated by the SAFE on 13 July 2009 and effective on 1 August 2009, domestic entities
may apply for foreign exchange registration for foreign direct investment upon its approval. In
addition, the SAFE issued and implemented the Notice on Further Simplify and Enhance
Foreign Exchange Policy on Direct Investment (݁
) on 13 February 2015 and 1 June 2015, to cancel the administrative approval for
foreign exchange registration for foreign direct investment and grant banks the rights to
directly review and handle foreign exchange registration for foreign direct investment.
Pursuant to the Measures for the Administration of Overseas Investment ( ྤ̮ҳ༟၍
) which was issued by the MOFCOM on 6 September 2014 and came into effect on
6 October 2014, the MOFCOM and the commerce departments at provincial levels shall subject
the overseas investment of enterprises to verification and approval or filing management,
depending on the actual circumstances of investment. Overseas investment involving any
sensitive country or region, or any sensitive industry shall be subject to verification and
approval management. Overseas investment under other circumstances shall be subject to filing
management.
Pursuant to the Administrative Measures for Outbound Investment by Enterprises ( Ά
) promulgated by the NDRC on 26 December 2017 and came into effect
on 1 March 2018, the investing activities of enterprises in Chinese Mainland such as acquiring
overseas ownerships, controlling rights, operating and management rights and other relevant
interests by way of investing assets and interests or providing financing and guarantees to
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control its overseas enterprises, either directly or indirectly, are required to obtain approval or
filing with the NDRC in accordance with the relevant conditions of the overseas investment
projects. Outbound investment projects that involve sensitive countries and regions or sensitive
industries shall be subject to administration of verification and approval by the NDRC, and
non-sensitive outbound investment projects shall be subject to administration by record-filing.
For non-sensitive projects of US$300 million or above invested by local enterprise in Chinese
Mainland or carried out by overseas enterprises controlled by them, the investors shall file with
the NDRC and non-sensitive outbound investment projects, of which the investment amount of
investors in Chinese Mainland is less than US$300 million (exclusive) shall file with the
provincial counterpart of the NDRC.
Regulations on Import and Export
According to the Foreign Trade Law of the People’s Republic of China ( ʕശɛ͏΍ձ
) promulgated on 12 May 1994 and latest amended and effective on 30
December 2022 by the SCNPC, foreign trade operators engaged in the import and export of
goods or technology do not need to register with the foreign trade authority under the State
Council or its authorized agencies, which shall grant a license to the consignee or consignor
who applies for automatic licensing prior to completing customs clearance formalities for
imports and exports subject to automatic licensing; for technologies that are free for import and
export, the contract must be registered with the foreign trade department of the State Council
or its authorized agency.
According to the Customs Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷ऎ
) promulgated on 22 January 1987 and last amended by the SCNPC and came into effect
on 29 April 2021, the Customs of the People’s Republic of China is a governmental
organization responsible for supervision and control over all arrivals in and departures from the
Customs territory, who exercise its jurisdiction in all its aspects, including supervising the
transportation vehicles, goods, luggage, postal articles and other articles entering and leaving
the country, collecting customs duties and other taxes and fees, preventing and combating
smuggling, compiling customs statistics and handling other customs operations.
In addition, according to the Regulations of the People’s Republic of China Customs on
Administration of Recordation of Declaration Entities (၍
) promulgated by the General Administration of Customs on 19 November 2021 and
effective from 1 January 2022, “customs declaration entities” refer to the consignees and
consignors of import and export goods and customs declaration enterprises which make a filing
with the customs. If the enterprises apply for filing, they shall obtain the qualification of
market entities. The recordation of the customs declaration entities is valid for a long period
of time. The filing of the customs declaration enterprise is valid for long term.
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Regulations on Taxation
Enterprise Income Tax
The NPC promulgated the EIT Law on 16 March 2007 and revised it on 24 February 2017
and 29 December 2018. The Implementation Regulations of Enterprise Income Tax Law of the
People’s Republic of China (ૢԷ) was promulgated by
the State Council on 6 December 2007, took effect on 1 January 2008, and was revised twice
on 23 April 2019 and 6 December 2024. According to the EIT Law and its implementation
regulations, “resident enterprises” are enterprises which are set up in China in accordance with
law, or which are set up in accordance with the law of a foreign country (region) but which are
actually under the administration of institutions in China; “non-resident enterprises” are
enterprises which are set up in accordance with the law of a foreign country (region) and whose
actual administrative institution is not in China, but which have institutions or establishments
in China, or which have no such institutions or establishments but have income generated from
inside China. The rate of enterprise income tax shall be 25%, however, a non-resident
enterprise is generally subject to a 20% corporate income tax on PRC-sourced income, if it
does not have an establishment or premise in the PRC or has an establishment or premise in
the PRC but its PRC-sourced income has no real connection with such establishment or
premise; the high-tech enterprises that need key support from the PRC government will enjoy
a tax rate reduction to 15% for EIT. Corporate income tax for qualified small profit enterprises
shall be at a reduced tax rate of 20%.
V alue-added tax
According to the Provisional Regulations on V alue-added Tax of the People’s Republic of
China (೼ᅲБૢԷ), which was promulgated by the State Council on
13 December 1993, came into effect on 1 January 1994, and latest amended on 19 November
2017, and the Detailed Implementing Rules of the Provisional Regulations on V alue-added Tax
of the People’s Republic of China (), which was
promulgated by the MOF and the STA on 25 December 1993 and came into effect on the same
date, and was latest amended on 28 October 2011 and came into effect on 1 November 2011,
entities and individuals selling goods or providing processing, repairing or replacement
services, selling services, intangible assets and immovable assets and importing goods in the
PRC are taxpayers of value-added tax (V A T) and shall pay a V A T.
The V A T rates in the PRC have undergone multiple reforms: (1) pursuant to the
Provisional Regulations on V alue-added Tax of the People’s Republic of China, unless
otherwise stipulated, the V A T rate is 17% for taxpayers selling goods, labour services, or
tangible movable property leasing services or importing goods; 11% for taxpayers selling
transportation, postal, basic telecommunications, construction, or immovable leasing services,
selling immovables, transferring land use rights, or selling or importing specific goods; unless
otherwise stipulated, 6% for taxpayers selling services or intangible assets. After that, (2)
according to the Notice on Adjusting V alue-added Tax Rates (ஷ
), which was promulgated by the MOF and the STA on 4 April 2018, the tax rates of 17%
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and 11% applicable to any taxpayer’s V A T taxable sale or import of goods shall be adjusted to
16% and 10%, respectively, which became effective on 1 May 2018. Subsequently, (3) pursuant
to the Announcement on Relevant Policies for Deepening V alue-Added Tax Reform (ଉ
ʮѓ) promulgated by the MOF, the STA and the General
Administration of Customs on 20 March 2019, the value-added tax rates of 16% and 10%
applicable to any taxpayer’s V A T taxable sale or import of goods shall be adjusted to 13% and
9%, respectively, which became effective on 1 April 2019.
On 25 December 2024, the SCNPC promulgated the V alue-Added Tax Law of the
People’s Republic of China (), which will come into effect on 1
January 2026, when the Provisional Regulations on V alue-added Tax of the People’s Republic
of China will be abolished simultaneously.
Tax Preference Policies for Integrated Circuit industry
Pursuant to the Guidelines on Tax Preference Policies for Software and Integrated Circuit
Enterprises (2022) (ˏ(2022) ) issued and
implemented by the STA in May 2022, the integrated circuit industry enjoys a variety of tax
preferences. Enterprises for integrated circuit design, equipment, materials, packaging and
testing encouraged by the State, including but not limited to, regular exemption or reduction
of the enterprise income tax; key integrated circuit design enterprises encouraged by the State
can enjoy the regular exemption or reduction of enterprise income tax; staff training expenses
of integrated circuit design enterprises can be deducted before tax according to the actual
amount incurred.
In addition, the Notice on Supporting Import Tax Policy for the Development of
Integrated Circuit Industry and Software Industry (࢝
) issued by the MOF, the General Administration of Customs and the
STA on 16 March 2021, stipulates that import behaviours that conform to the circumstances
listed in this regulation are exempt from import duties. The implementation period is from 27
July 2020 to 31 December 2030. According to the provisions of the Notice on the Additional
V alue-Added Tax Deduction Policy for Integrated Circuit Enterprises (ණϓཥ༩Άุᄣ
) issued by the STA and the MOF on 20 April 2023, from 1 January
2023 to 31 December 2027, integrated circuit design, production, packaging and testing,
equipment, and material enterprises enjoy an additional deduction, 15%, of the input V A T that
can be credited in the current period from the output V A T payable. A list management system
will be adopted for enterprises eligible for the additional deduction policy. The specific
applicable conditions, management methods and enterprise lists will be formulated by the MIIT
in conjunction with other departments.
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Regulations on Dividend Distribution
Dividend Distribution System
The principal laws and regulations regulating the distribution of dividends by FIEs in the
PRC include the PRC Company Law, the Foreign Investment Law of the People’s Republic of
China () and its Implementation Rules for the Foreign
Investment Law of the People’s Republic of China (ૢ
Է). Under the current regulatory regime in China, FIEs in China could only pay dividends
only out of their retained earnings, determined in accordance with PRC accounting standards
and regulations. Where a company in the PRC (including a foreign-invested enterprise)
distributes its after-tax profits for the current year, it shall allocate 10% of the profits as the
company statutory common reserve. The company may make no more allocation should the
accumulated balance of the Company’s statutory common reserve account for more than 50%
of the company registered capital. If the statutory revenue reserve is not sufficient to cover the
losses made in the previous year, the profits of the current year shall be used to cover such
losses before making allocation to the aforesaid statutory revenue reserve. After making
allocation to the statutory revenue reserve, the company may make allocation of profit after tax
to the discretionary revenue reserve subject to the resolution at general meetings.
Pursuant to the Foreign Investment Law of the People’s Republic of China, the capital
contributions, profits, capital gains, proceeds out of asset disposal, licensing fees of intellectual
property rights, indemnity or compensation legally obtained, or proceeds received upon
settlement by foreign investors within China, may be freely remitted inward and outward in
RMB or a foreign currency.
Dividend Withholding Tax
Pursuant to the Reply of the Imposition of Enterprise Income Tax on B-share and Other
Dividends of Non-resident Enterprises (͏Άุ՟੻B੻
ҭᔧ) that was promulgated and implemented by the STA on 24 July 2009, resident
enterprises in the PRC with shares of public issuance and listing (A shares, B shares and
overseas shares) in the PRC and abroad shall withhold and pay corporate income tax at a
uniform rate of 10% when distributing dividends to non-resident enterprise shareholders in
2008 and later years. Non-resident enterprise shareholders wishing to enjoy tax treaty
treatment shall proceed in accordance with the relevant provisions of the tax treaty.
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The Notice on the Taxation Policies Related to the Pilot Programme of the Shanghai-
Hong Kong Stock Connect (ஷ
) promulgated by the MOF, the STA and CSRC on 31 October 2014 and came into effect
on 17 November 2014 stipulates: (1) for the dividend gained by Mainland individual investors
who invest in the H Shares listed on the Hong Kong Exchange through the Shanghai-Hong
Kong Stock Connect, the company of the H Shares should apply to China Securities Depository
and Clearing Corporation Limited (CSDC), which will provide the H-share company with a list
of mainland individual investors. The company of the H Shares shall withhold on behalf of
these shareholders individual income tax at the rate of 20% in the distribution of dividend.
Individual investors may, by producing valid tax payment proofs, apply to the competent tax
authority of CSDC for tax credit relating to the withholding tax already paid abroad. For
dividends obtained by mainland securities investment funds that invest in the shares listed on
the Hong Kong Exchange through the Shanghai-Hong Kong Stock Connect, the company will
withhold individual income tax in the distribution of dividend pursuant to the foregoing
provisions. (2) The dividends obtained by mainland enterprise investors that invest in the
shares listed on the Hong Kong through the Shanghai-Hong Kong Stock Connect shall be
included in their total income and subject to corporate income tax in accordance with the law.
Among them, the dividends obtained by mainland resident enterprises that have held H shares
for 12 consecutive months are exempt from corporate income tax in accordance with the law.
According to the Treaty on the Avoidance of Double Taxation and Tax Evasion between
Chinese Mainland and Hong Kong (ᅄ೼ձԣ˟
τર), in respect of the dividends paid by a PRC resident enterprise to a Hong Kong
resident, the withholding tax shall not exceed 5% of the total dividends if the payee
beneficially owns 25% or more interest in the payor; otherwise, such withholding tax shall not
exceed 10% of the total dividends.
Regulations on Labour and Employment
Labour Law and Labour Contract
According to the Labor Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷௶ਗ
) issued by the SCNPC on 5 July 1994, most recently amended on 29 December 2018 and
became effective on the same day, every employer must ensure workplace safety and sanitation
in accordance with national laws and regulations, provide relevant training to labours, prevent
accidents in the process of labour, and lessen occupational hazards.
Pursuant to the Labor Contract Law of the People’s Republic of China ( ʕശɛ͏΍ձ
) issued by the SCNPC on 29 June 2007, amended on 28 December 2012 and
became effective on 1 July 2013, a written contract of employment shall be entered into to
establish labour relationship; if the labour remuneration is lower than the local minimum wage
standard, the difference should be paid.
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Social Insurance and Housing Provident Fund
In accordance with the Social Insurance Law of the People’s Republic of China ( ʕശ
) issued by the SCNPC on 28 October 2010, last amended on 29
December 2018 and became effective on the same day, as well as other relevant provisions, an
employee shall participate in five types of social insurance funds, including pension, medical,
unemployment, maternity and occupational injury insurance. The premiums for maternity
insurance and occupational injury insurance are paid by the employer, while the premiums for
pension insurance, medical insurance and unemployment insurance are paid by both the
employer and the employee. If the employer fails to fully contribute to social insurance funds
on time, the collection agency for such social insurance may demand the employer to make full
payment or to pay the shortfall within a set period and collect a late charge. If the employer
fails to pay after the due date, the relevant government administrative body may impose a fine
on the employer. An employer shall, within thirty days from the date of incorporation of the
entity, proceed with the business license, registration certificate or entity seal to the local social
insurance agency to apply for social insurance registration. An employer shall, within thirty
days after taking on labour, proceed to the social insurance agency to apply for social insurance
registrations on behalf of the employees.
According to the Supreme People’s Court’s Interpretation (II) on Several Issues
Concerning the Application of Law in Labor Dispute Cases (ن
༆ᙑ(ɚ)) issued by the Supreme People’s Court on July 31, 2025,
which became effective on September 1, 2025, any agreement between an employer and an
employee to waive social insurance contributions, or any undertaking by an employee that such
contributions need not be paid, shall be deemed null and void. And if an employer fails to make
social insurance contributions in accordance with applicable laws for an employee, such
employee is entitled to unilaterally terminate the labor contract and demand statutory economic
compensation according to the Labor Contract Law of the PRC. As advised by our PRC Legal
Adviser, in the absence of material employee complaints, reports or related
lawsuits/arbitrations, the likelihood for us of being subject to centralized collection of
underpaid contributions or significant administrative penalties as a result of the New Judicial
Interpretation is remote. See “Risk Factors — Failure to comply with the PRC Social Insurance
Law and the Regulation on the Administration of Housing Provident Funds or other PRC labor
related regulations may subject us to fines and other legal or administrative sanctions.”
According to the Housing Provident Fund Regulations (၍ଣૢԷ) which
was promulgated by the State Council on 3 April 1999, latest revised on 24 March 2019 and
became effective on the same day, enterprises must register with the competent managing
centre for housing funds and contribute on behalf of their employees to housing funds. For
employers who fail to contribute on time as required may be ordered to make up within a
stipulated time limit, and the application to the court for mandatory enforcement may be
conducted against those who still fail to comply after the expiry of such period.
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Regulations on Anti-Monopoly and Anti-Unfair Competition
Anti-Monopoly
Pursuant to the Anti-Monopoly Law of the People’s Republic of China ( ʕശɛ͏΍ձ
) (the “Anti-Monopoly Law”) promulgated by the SCNPC on August 30, 2007,
which came into effect on 1 August 2008 and last amended on 24 June 2022, the prohibited
monopolistic acts include monopolistic agreements, abuse of a dominant market position and
concentration of businesses that may have the effect to eliminate or restrict competition.
According to the provisions of the Anti-Monopoly Law, “monopolistic agreements” refer
to the agreements, decisions or other concerted practices to eliminate or restrict competition.
Competing business operators, or operators and their transaction counterparties, are prohibited
to enter into monopoly agreements specified by the Anti-Monopoly Law between each other,
such as by fixing or changing the price of commodities, limiting the number of output or selling
of commodities, dividing the sales markets or the raw material procurement markets, and fixing
the price of goods for resale to third parties, unless the agreement will satisfy the exemptions
under the Anti-Monopoly Law. Operators shall not organize other operators to reach a
monopoly agreement or provide substantial assistance to other operators in reaching a
monopoly agreement.
According to the provisions of the Anti-Monopoly Law, “abuse of dominant market
position” refers to a business operator with a dominant market position to abuse its dominant
market position to conduct acts, including seven prohibited categories of acts listed in the
Anti-Monopoly Law, among others: (1) selling commodities at unfairly high prices or buying
commodities at unfairly low prices; (2) selling products at prices below cost without any
justifiable cause; (3) refusing to trade with a trading party without any justifiable cause. Among
them, “dominant market position” shall mean that an undertaking is able to control the prices,
quantities or any other terms of transaction in the relevant market or is able to obstruct and
affect the entry of other undertakings into the relevant market. The SAMR issued the
Provisions on the Prohibitions of Acts of Abuse of Dominant Market Positions ( ຫ˟ᏺ̹͜
) on 10 March 2023 which became effective on 15 April 2023, to further
prevent and eradicate the abuse of dominant market position.
According to the provisions of the Anti-monopoly Law, “concentration of undertakings”
refers to (1) merger of undertakings; (2) acquisition of control over other undertakings by an
undertaking through acquisition of equity or assets; (3) acquisition of control over other
undertakings by an undertaking through contract or any other means or ability to exert decisive
impact on other undertakings. Where a concentration of undertakings reaches the filing
threshold by the State Council, undertakings shall declare in advance to the anti-monopoly law
enforcement agencies of the State Council and may not implement concentration without
making the declaration. Where a concentration of undertakings fails to reach the filing
threshold by the State Council, there is evidence that the concentration of undertakings has or
may have the effect of excluding or limiting competition, the State Council anti-monopoly law
enforcement authority may order the operators to file the concentration of undertakings.
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However, where one of the following is the case relevant to an operator consolidation,
declaration to the State Council anti-monopoly law enforcement authorities is not required: (1)
one of the parties to a consolidation holds fifty percent or more assets or shares that grant
voting rights in each of the other Operators; or (2) in each of the parties to a consolidation, fifty
percent or more assets or shares that grant voting rights in said operators are held by the same
business operator which is not party to the consolidation.
Anti-Unfair Competition
Pursuant to the provisions of the Anti-Unfair Competition Law of the People’s Republic
of China () (the “Anti-Unfair Competition Law”)
promulgated by the SCNPC on 2 September 1993, latest amended on 27 June 2025 and came
into effect on 15 October 2025, “unfair competition” refers to that the operator disrupts the
market competition order and damages the legitimate rights and interests of other operators or
consumers in violation of the provisions of the Anti-Unfair Competition Law in the production
and operating activities. Among them, the “operator” refers to “natural persons, legal persons
and unincorporated organizations engaged in the production and operation of goods or
provision of services (hereinafter as goods including services)”. Pursuant to the provisions of
the Anti-Unfair Competition Law, operators: (1) shall not conduct misleading behaviours; (2)
shall not bribe the entities or individuals with property or by other means; (3) shall neither not
conduct any false or misleading commercial publicity in respect of the performance, functions,
quality, sales, user reviews, and honours received of its commodities to defraud or mislead
consumers and other operators, nor help other operators to conduct false or misleading
commercial publicity by means including organizing false transactions and false reviews; (4)
shall not infringe on trade secrets; (5) shall not fabricate or disseminate nor instruct another
person to fabricate or disseminate false or misleading information or damage the business
reputation of the other operators or their goods. Furthermore, operators conducting sales with
prizes or engaging in production or operations activities online shall also abide by the relevant
provisions of the Anti-Unfair Competition Law.
Regulations on Securities and Filing for Overseas Listing
Laws and Regulations on Securities
The PRC Securities Law, which was promulgated by the SCNPC on 29 December 1998,
and was latest amended on 28 December 2019 and took effect on 1 March 2020,
comprehensively regulating activities in the Chinese Mainland securities market including
issuance and trading of securities, takeovers by listed companies, securities exchanges,
securities companies and the duties and responsibilities of securities regulatory authorities, etc.
The PRC Securities Law further regulates that a domestic enterprise issuing securities overseas
directly or indirectly or listing their securities overseas for trading shall comply with the
relevant provisions of the State Council. The CSRC is the securities regulatory body set up by
the State Council to supervise the securities market according to law, maintain order in the
market. Currently, the issue and trading of H shares are principally governed by the laws and
regulations, rules and normative documents promulgated by the State Council and the CSRC.
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Filing for Overseas Listings
Pursuant to the Trial Measures for the Administration on Overseas Securities Offering and
Listing by Domestic Companies () released
by the CSRC on 17 February 2023 and became effective on 31 March 2023, together with
supporting guidelines applicable for regulation rules, the unified management of filings shall
be implemented for direct or indirect overseas offerings of securities and listings by domestic
enterprises. All issuers are required to complete the filing procedures and report relevant
information to the security regulatory authority of the State Council. Issuers listing directly in
overseas markets are required to file with the CSRC within three working days after submitting
its application for overseas listing.
Pursuant to the provisions of the Trial Measures for the Administration on Overseas
Securities Offering and Listing by Domestic Companies, no overseas offering of securities and
listing shall be made under any of the following circumstances for domestic enterprises:
(1) such financing for listing is explicitly prohibited by provisions in laws,
administrative regulations or relevant state rules;
(2) the intended overseas securities offering and listing may endanger national security
as reviewed and determined by relevant competent authorities under the State
Council in accordance with law;
(3) the domestic enterprise, its controlling shareholders or the actual controller, have
committed criminal offences such as corruption, bribery, misappropriation of
property, embezzlement, or undermining the order of the socialist market economy
during the recent three years;
(4) the domestic enterprise is suspected of committing criminal offences or major
violations of laws, and is under investigation according to law and no conclusion or
opinion has yet been made thereof;
(5) there are material ownership disputes over equity held by its controlling
shareholders or by shareholders that are controlled by the controlling shareholder or
actual controller.
Pursuant to the Provisions on Strengthening the Confidentiality and Archives
Administration Related to the Overseas Securities Offering and Listing by Domestic
Enterprises (),
where a domestic enterprise provides or publicly discloses any document or material that
involving state secrets and working secrets of state agencies to the relevant securities
companies, securities service institutions, overseas regulatory authorities and other entities and
individuals, it shall report to the competent department with the examination and approval
authority for approval in accordance with the law, and submit to the secrecy administration
department of the same level for filing. The working papers formed within the territory of
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Chinese Mainland by the securities companies and securities service agencies that provide
corresponding services for the overseas issuance and listing of domestic enterprises shall be
kept within the territory of Chinese Mainland. Cross-border transfer shall go through the
examination and approval formalities in accordance with the relevant provisions of the State.
REGULATION ENVIRONMENT IN HONG KONG, CHINA
Overview of the Laws and Regulations Relating to Our Business and Operations in Hong
Kong.
Regulation on Business Registration
Business Registration Ordinance (Chapter 310 of the Laws of Hong Kong) (“BRO”)
Every person, (a company or individual), who carries on a business in Hong Kong is
required under the BRO to apply for a business registration certificate from the Inland Revenue
Department within one month from the date of commencement of the business, and to display
a valid business registration certificate at the place of business. Business registration does not
serve to regulate business activities and it is not a licence to trade. Business registration serves
to notify the Inland Revenue Department of the establishment of a business in Hong Kong.
Business registration certificate will be issued on submission of the necessary document(s)
together with payment of the relevant fee. A business registration certificate is renewable every
year or every three years (if business operators elect for issuance of business registration
certificate that is valid for three years). Any person who fails to apply for business registration
shall be guilty of an offence and shall be liable to a fine of HK$5,000 and to imprisonment for
one year.
Regulations on Employment and Labor
Occupational Safety and Health Ordinance (Chapter 509 of the Laws of Hong Kong)
(“OSHO”)
The OSHO provides for the safety and health protection to employees in workplace, both
industrial and non-industrial. Under section 6 of the OSHO, every employer must, so far as
reasonably practicable, ensure the safety and health at work of all the employer’s employees
by:
 providing and maintaining plant and systems of work that are safe and without risks
to health;
 making arrangements for ensuring safety and absence of risks to health in
connection with the use, handling, storage or transport of plant and substances;
 providing information, instruction, training and supervision as may be necessary to
ensure the safety and health at work of the employees;
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 as regards any workplace under the employer’s control, maintaining the workplace
in a condition that is safe and without risks to health or providing or maintaining
means of access to and egress from the workplace that are safe and without any such
risks; and
 providing or maintaining a working environment for the employees that is safe and
without risks to health.
Failure to comply with the above provisions constitutes an offence and the employer is
liable on conviction to a fine of HK$200,000. An employer who fails to do so intentionally,
knowingly or recklessly commits an offence and is liable on conviction to a fine of
HK$200,000 and to imprisonment for six months.
The Commissioner for Labour may serve an improvement notice on an employer against
contravention of the OSHO or the FIUO, or a suspension notice against activity or condition
or use of workplace or of any plant or substance located on the workplace which may create
an imminent risk of death or serious bodily injury to the employees. Failure to comply with a
requirement of an improvement notice or contravenes a suspension notice without reasonable
excuse constitutes an offence and the employer is liable on conviction to a fine of HK$200,000
and HK$500,000, respectively, and to imprisonment for 12 months.
Occupiers Liability Ordinance (Chapter 314 of the Laws of Hong Kong) (“OLO”)
The OLO regulates the obligations of a person occupying or having control of premises
on injury resulting to persons or damage caused to goods or other property lawfully on the land.
The Occupiers Liability Ordinance imposes a common duty of care on an occupier of premises
to take such care as in all the circumstances of the case is reasonable to see that the visitors
will be reasonably safe in using the premises for the purposes for which he is invited or
permitted by the occupier to be there.
Employment Ordinance (Chapter 57 of the Laws of Hong Kong) (“EO”)
The EO regulates the general conditions of employment and matters connected therein in
Hong Kong. It provides for various employment-related benefits and entitlements to
employees. All employees covered by the EO, irrespective of their hours of work, are entitled
to protection including payment of wages, restrictions on wages deductions and the granting
of statutory holidays. Employees who are employed under a continuous contract are further
entitled to such benefits as rest days, paid annual leave, sickness allowance, severance payment
and long service payment.
Employee’s Compensation Ordinance (Chapter 282 of the Laws of Hong Kong) (“ECO”)
The ECO establishes a no-fault and non-contributory employee compensation system for
work injuries and lays down the rights and obligations of employers and employees in respect
of injuries or deaths caused by accidents arising out of and in the course of employment, or by
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prescribed occupational diseases. Under the ECO, if an employee sustains an injury or dies as
a result of an accident arising out of and in the course of his employment, his employer is in
general liable to pay compensation even if the employee might have committed acts of faults
or negligence when the accident occurred. Similarly, an employee who suffers incapacity or
dies arising from an occupational disease is entitled to receive the same compensation as that
payable to employees injured in occupational accidents.
According to section 40 of the ECO, all employers are required to take out insurance
policy to cover their liabilities both under the ECO and at common law for injuries at work in
respect of all employees (including full-time and part-time employees) for an amount not less
than the applicable amount specified under the ECO. An employer who fails to comply with
the ECO to secure an insurance cover is liable on conviction upon indictment to a fine at level
6 (currently at HK$100,000) and to imprisonment for two years, and on summary conviction
to a fine at level 6 (currently at HK$100,000) and to imprisonment for one year.
Minimum Wage Ordinance (Chapter 608 of the Laws of Hong Kong) (“MWO”)
The MWO provides for a prescribed minimum hourly wage rate (currently set at HK$42.1
per hour) during the wage period for every employee engaged under a contract of employment
under the EO (except those specified under section 7 of the MWO). A provision of a contract
of employment that purports to extinguish or reduce any right, benefit or protection conferred
on the employee by the MWO is void.
Mandatory Provident Fund Scheme Ordinance (Chapter 485 of the Laws of Hong Kong)
(“MPFSO”)
The MPFSO provides for, inter alia, the establishment of a system of privately managed,
employment related mandatory provident fund schemes for members of the workforce to
accrue financial benefits for retirement. Subject to the minimum and maximum relevant
income levels, it is mandatory for both employers and their employees to contribute 5% of the
employee’s relevant income to the mandatory provident fund scheme. Currently, the minimum
and maximum relevant income levels for employees who are paid monthly are HK$7,100 and
HK$30,000 respectively. Further, employers are obliged to enroll their employees aged 18 to
65 to a Mandatory Provident Fund Scheme within 60 days of his or her employment.
Immigration Ordinance (Chapter 115 of the Laws of Hong Kong) (“IO”)
Generally speaking, under the IO, a person is required to hold a visa/entry permit to work
in Hong Kong unless he has the right of abode or right to land in Hong Kong. Section 17I of
the IO stipulates that any person who is the employer of an employee who is not lawfully
employable commits an offence and is liable to a fine of HK$350,000 and to imprisonment for
three years if the employee is not a prohibited employee, and if the employee is a prohibited
employee, to a fine of HK$500,000 and to imprisonment for 10 years.
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Regulations on Taxation
Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong) (“IRO”)
As our Group carry out business in Hong Kong, the Company are subject to the profits
tax regime under the IRO. The IRO is an ordinance for the purposes of imposing taxes on
property, earnings and profits in Hong Kong. The IRO provides, among others, that persons,
which include corporations, partnerships, trustees and bodies of person, carrying on any trade,
profession or business in Hong Kong are chargeable to tax on all profits (excluding profits from
the sale of capital assets) arising in or derived from Hong Kong from such trade, profession or
business. As at the Latest Practicable Date, the standard profits tax rate for corporations is
currently at 8.25% on assessable profits up to HK$2,000,000; and 16.5% on any part of
assessable profits over HK$2,000,000. The IRO also contains provisions relating to, among
others, permissible deductions for outgoings and expenses, set-offs for losses and allowance
for depreciation.
Section 51(1) of the IRO requires every person, upon receipt of a written notice from the
Inland Revenue Department, to submit a return within a reasonable time as stated in such
notice. In relation to (i) any tax computation containing incorrect information (the “Incorrect
Information”); and (ii) the filing of tax return containing the Incorrect Information, a person
may be subject to prosecution under section 80(2) or 82(1) of the IRO pursuant to which:
(a) Any person who without reasonable excuse files an incorrect return commits an
offence under section 80(2) of the IRO and is liable on conviction to a fine at level
3 (i.e. HK$10,000) and a further fine of treble the amount of tax which has been
undercharged as a result of the incorrect return, statement or information or
omission, or would have been so undercharged if the return, statement or
information had been accepted as correct or the omission had not been detected.
(b) Any person who willfully with intent to evade or to assist any other person to evade
tax omits from a return any sum which should be included commits an offence under
section 82(1) of the IRO is liable:
(i) on summary conviction to a fine at level 3 (i.e. HK$10,000), a further fine of
treble the amount of tax which has been undercharged in consequence of the
offence or which would have been undercharged if the offence has not been
detected and imprisonment for 6 months; and
(ii) on indictment to a fine at level 5 (i.e. HK$50,000), a further fine of treble the
amount of tax which has been undercharged in consequence of the offence or
which would have been undercharged if the offence has not been detected and
imprisonment for 3 years.
(c) Under sections 80(5) and 82(2) of the IRO, the Commissioner of Inland Revenue
may compound any offence in lieu of prosecution.
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(d) Under section 82A of the IRO, any person who without reasonable excuse makes an
incorrect return by omitting or understating anything in respect of which he is
required to make a return, shall, if no prosecution under section 80(2) or 82(1) has
been instituted in respect of the same facts, be liable to be assessed to additional tax
of an amount not exceeding treble the amount of tax undercharged as a result of the
filing of the incorrect tax return.
Additionally, section 51C of the IRO provides that any person carrying on a trade,
profession or business in Hong Kong shall keep sufficient records in the English or Chinese
language of his income and expenditure to enable the assessable profits of such trade,
profession or business to be readily ascertained and shall retain such records for a period of not
less than seven years after the completion of the transactions, acts or operations to which they
relate. The section sets out general requirement of records that should be kept. Any person who
without reasonable excuse fails to comply with section 51C is liable on conviction to a
maximum fine at level 6 (i.e. HK$100,000).
Regulations on Data Protection
Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong) (“PDPO”)
The PDPO imposes a statutory duty on data users to comply with the requirements of the
six data protection principles (the “Data Protection Principles”) contained in Schedule 1 to the
PDPO. The PDPO provides that a data user shall not do an act, or engage in a practice, that
contravenes a Data Protection Principle unless the act or practice, as the case may be, is
required or permitted under the PDPO.
The Data Protection Principles are summarized as follows:
(1) Adequate personal data should be collected (i) for a lawful purpose, which is
necessary for and directly related to a function or activity of the data user, (ii) by
fair and lawful means. The person whose data is being collect is informed (a) that
whether he is obligatory or voluntary for him to supply the data, (b) the purpose of
the collection and the class of persons to whom the data may be transferred, (c) on
or before, his right to access and correct the data collected and the information of
the person who might handle such requests.
(2) All practicable steps shall be taken to ensure the accuracy of the person data
collected, and kept not long than is necessary.
(3) Personal data should not be used for the purposes outside of the person’s consent.
(4) All practicable steps shall be taken to ensure that any personal data held by a data
user is protected against unauthorized or accidental access, processing, erasure, loss
or use.
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(5) All practicable steps shall be taken to ensure that a person can (a) ascertain a data
user’s policies and practices in relation to personal data; (b) be informed of the kind
of personal data held by a data user; (c) be informed of the main purposes for which
personal data held by a data user is or is to be used.
(6) A data subject shall be entitled to ascertain whether a data user holds personal data
of which he is the data subject and request access to personal data. The data subject
should be given reasons if the request is refused and right to object to the refusal.
Contravention with the Data Protection Principles may entitle the Privacy Commissioner
for Personal Data to issue a written notice directing the data user to remedy and prevent
recurrence of contravention. Contravention with the above notice is an offence and the offender
is liable on (a) first conviction to a fine HK$50,000 and to imprisonment for two years, and
if the offence continues after the conviction, to a daily penalty of HK$1,000; and (b) second
or subsequent conviction to a fine at HK$100,000 and to imprisonment for two years, and if
the offence continues after the conviction, to a daily penalty of HK$2,000. It is a defense to
the above offence if the data user shows that he exercised all due diligence to comply with the
enforcement notice.
The PDPO also gives data subjects certain rights, inter alia:
 the right to be informed by a data user whether the data user holds personal data of
which the individual is the data subject;
 if the data user holds such data, to be supplied with a copy of such data; and
 the right to request correction of any data they consider to be inaccurate.
The PDPO criminalises, including but not limited to, the misuse or inappropriate use of
personal data in direct marketing activities, non-compliance with a data access request and the
unauthorised disclosure of personal data obtained without the relevant data user’s consent. An
individual who suffers damage, including injured feelings, by reason of a contravention of the
PDPO in relation to his or her personal data may seek compensation from the data user
concerned.
Regulations on Intellectual Property Rights
Copyrights Ordinance (Chapter 528 of the Laws of Hong Kong)
The Copyright Ordinance recognizes copyright as a property right subsisting in various
forms of works.
Copyright in a work is infringed by a person who without the licence of the copyright
owner does, or authorizes another to do, any of the acts restricted by the copyright, which
includes (also known as primary infringement): (a) copying the work; (b) issuing copies of the
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work to the public; (c) renting copies of the work to the public; (d) making available copies
of the work to the public; (e) performing, showing or playing the work in public; (f)
broadcasting the work or including it in a cable program service; (g) making an adaptation of
the work or doing any of the above in relation to an adaptation; and (h) other acts referred to
in Part II of the Copyright Ordinance.
The Copyright Ordinance also provides for the acts which are categorized as secondary
infringement, they include, amongst others: possessing, exhibiting, or distributing for the
purpose of or in the course of any trade or business (it being immaterial whether or not the
trade consists of dealing in infringing copies of copyright works); selling or letting for hire, or
offering or exposing for sale or hire; or distributing otherwise to affect prejudicially the
copyright owner, an infringing copy.
Commission of secondary infringement is a criminal offence if the infringer knows or has
reason to believe the copy of a work to be an infringing copy of the work. For the sale of an
infringing copy in the course of any trade or business, upon conviction on indictment, the
infringer is liable to a fine at HK$50,000 in respect of each infringing copy and to
imprisonment for four years.
Trade Marks Ordinance (Chapter 559 of the Laws of Hong Kong)
The Trade Mark Ordinance protects registered trademarks. The duration of the registered
trademarks are for ten years, which can be further renewed for ten years per renewal. A
registered trade mark may be challenged in revocation proceedings if it is not used in Hong
Kong for a continuous period of three years.
A person infringes a registered trade mark if he uses in the course of trade or business a
sign:
(1) which is identical to the trade mark in relation to goods or services which are
identical to those for which it is registered;
(2) which is identical to the trade mark in relation to goods or services which are similar
to those for which it is registered, and the use of the sign in relation to those goods
or services is likely to cause confusion on the part of the public;
(3) which is similar to the trade mark in relation to goods or services which are identical
or similar to those for which it is registered and the use of the sign in relation to
those goods or services is likely to cause confusion on the part of the public; or
(4) which is identical or similar to the well-known trade mark in relation to any goods
or services, and the use of the sign, being without due cause, takes unfair advantage
of, or is detrimental to, the distinctive character or repute of the trade mark.
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Regulations on Anti-money Laundering and Counter-terrorist financing
Drug Trafficking (Recovery of Proceeds) Ordinance (Chapter 405 of the Laws of Hong
Kong) (“DTROP”)
Among other things, the DTROP contains provisions for the investigation of assets
suspected to be derived from drug trafficking activities, the freezing of assets on arrest and the
confiscation of the proceeds from drug trafficking activities by the competent authorities. It is
an offence under the DTROP for a person to deal with any property knowing or having
reasonable grounds to believe it to represent the proceeds from drug trafficking. The DTROP
requires a person to report to an authorised officer if he/she knows or suspects that any property
(in whole or in part directly or indirectly) represents the proceeds of drug trafficking or is
intended to be used or was used in connection with drug trafficking, and failure to make such
disclosure constitutes an offence under the DTROP .
Organized and Serious Crimes Ordinance (Chapter 455 of the Laws of Hong Kong)
(“OSCO”)
Among other things, the OSCO empowers officers of the Hong Kong Police Force and the
Hong Kong Customs & Excise Department to investigate organised crime and triad activities,
and confers jurisdiction on the Hong Kong courts to confiscate the proceeds of organised and
serious crimes, to issue restraint orders and charging orders in relation to the property of
defendants of specified offences under the OSCO. The OSCO extends the money laundering
offence to cover the proceeds from all indictable offences in addition to drug trafficking.
United Nations (Anti-Terrorism Measures) Ordinance (Chapter 575 of the Laws of Hong
Kong) (“UNATMO”)
Among other things, the UNA TMO stipulates that it is a criminal offence to: (1) provide
or collect property (by any means, directly or indirectly) with the intention or knowledge that
the property will be used to commit, in whole or in part, one or more terrorist acts; or (2) make
any property or financial (or related) services available, by any means, directly or indirectly,
to or for the benefit of a person knowing that, or being reckless as to whether, such person is
a terrorist or terrorist associate, or collect property or solicit financial (or related) services, by
any means, directly or indirectly, for the benefit of a person knowing that, or being reckless as
to whether, the person is a terrorist or terrorist associate. The UNA TMO also requires a person
to disclose his knowledge or suspicion of terrorist property to an authorised officer, and failure
to make such disclosure constitutes an offence under the UNA TMO.
REGULATORY ENVIRONMENT IN TAIW AN, CHINA
Set out below is a summary of the major laws and regulations of Taiwan which our
business operations in Taiwan would be subject to:
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Laws and Regulations Relating to Daily Operations
Cross Strait Investment
In Taiwan, pursuant to the Measures Governing Investment Permit to the People of
Mainland Area (جannounced on 3rd July 2009 and latest
amended on 30th December 2020) (the “ Measures ”), which is stipulated according to
Paragraph 2 of Article 72 and of the Paragraph 3 of Article 73 of the Act Governing Relations
between the People of the Taiwan Area and the Mainland Area (ڷ
ૢԷ) (announced on 16th September 1992 and latest amended on 8th June 2022) (the “ Act”),
the investors of the Mainland Area (the “ Mainland investors ”) including the individuals,
juristic persons, organizations, other institutions from Mainland and the companies they invest
into in a third area, shall submit applications, together with the investment plans, certificates
and other required documents, to the Department of Investment Review, Ministry of Economic
Affairs (the “ DIR”) for approval prior to investment. The same shall apply if and when such
investment plans be changed or amended or any of such investors assign or transfer the
investment to a third party. Furthermore, according to Paragraph 1 Article 73 of the Act and
Paragraph 2 of Article 8 of the Measures, Mainland Investors may be prohibited from investing
in the following enterprises which: (i) are in position of economic exclusive occupancy,
oligopoly or monopoly; (ii) have political, social and cultural sensitivity or impact upon
national security; and (iii) have negative influence upon the national economic development or
financial stability, and the invested industry and business shall be also subject to the Positive
List for Mainland Investors (ΐ) announced by the
DIR.
The invested companies in a third area mentioned in the preceding paragraph refer to
those invested by the individuals, juristic persons, organizations and other institutions from
Mainland and in one of the following situations: (i) directly or indirectly holding the shares
issued by such invested company or the total contributing amount exceeding thirty percent
(30%); or (ii) having the controlling power over the companies in a third area. Additionally, the
Mainland Investors shall apply for the foreign exchange settlement against the interest accrued
on his annual income, or against the profit surplus distributed to such Mainland Investors from
his investment.
Pursuant to Article 386 of the Taiwan Company Act (announced on 26th December 1929
and latest amended on 29th December 2021), a foreign company may designate a
representative to establish a representative office in Taiwan. In the case of a representative
office established by profit-seeking enterprises from Chinese Mainland or by their invested
profit-seeking enterprises in a third area (ୋɧήਜҳ༟ʘᐄлԫ
ุ), it shall comply with the Regulations Governing the Permission of Establishing Branches
or Representative Offices in Taiwan by Profit-Seeking Enterprises in Chinese Mainland or
Their Invested Profit-Seeking Enterprises in a Third Area (ୋɧή
جannounced on 3rd July 2009 and latest
amended on 17th November 2022) (the “ Representative Office Regulation ”), including but
not limited to (i) only performing the permissible activities (e.g. contracting, providing
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quotations, price negotiations, bidding, procurement, market research, and the collection,
compilation, and analysis of market-related data) and being prohibited from engaging in
research and development activities based on Article 14, and (ii) being prohibited from
engaging activities set forth in Article 18.
Foreign Exchange Control
In Taiwan, foreign exchange control are mainly governed by the Foreign Exchange
Regulation Act ( ၍ଣ̮ිૢԷ) (announced on 11th January 1949 and latest amended on 29th
April 2009) (the “ FERA ”). Under the Foreign Exchange Regulation Act, the Central Bank of
Republic of China (Taiwan) is authorized in charge of foreign exchange business and
stipulating the declaration rules, i.e. the Regulations Governing the Declaration of Foreign
Exchange Receipts and Disbursements or Transactions (جannounced
on 30th August 1995 and latest amended on 26th December 2022).
Pursuant to Article 6-1 of the FERA and Articles 4 to 6 of the Regulations Governing the
Declaration of Foreign Exchange Receipts and Disbursements or Transactions, a company,
established in the R.O.C. pursuant to the laws of the R.O.C. or recognized by and registered
with the government of the R.O.C., shall declare its foreign exchange receipts, disbursements
or transactions as required according to the remittance brackets and the natures of relevant
transactions extracted as follows.
A. No deed for declaration — for foreign exchange receipts, disbursements or
transactions involving less than NT$500,000 or its equivalent in foreign currency.
B. Direct declaration of foreign exchange settlement — for settlements against the New
Taiwan dollar in the following foreign exchange receipts and disbursement or
transactions:
(a) Foreign exchange receipts from export of goods or provision of services to
non-residents;
(b) Foreign exchange disbursements for import of goods, or for services provided
by non-residents;
(c) Foreign exchange purchased or sold within the annual aggregate settlement
amount not exceeding the equivalent of US$50 million; and
(d) Foreign exchange sold by a representative or business office that does not have
operating income in Taiwan to cover its office expenses.
C. Declaration of foreign exchange settlement requiring documentation — for
settlement of foreign exchange against the New Taiwan dollar in the following
foreign exchange receipts and disbursement or transactions:
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(a) A single remittance with an amount over the equivalent of US$1 million; and
(b) Remittances approved by the competent authorities for direct investment,
portfolio investment or futures trading; and
(c) Remittances for transactions conducted within the territory of the R.O.C.
involving goods or services located outside the territory of the R.O.C.
D. Declaration of foreign exchange settlement requiring approval — for settlement of
foreign exchange against the New Taiwan dollar in the foreign exchange receipts
and disbursement or transactions where essential remittances by the company whose
annual aggregate settlement amount of foreign exchange purchased or sold has
exceeded the equivalent of US$50 million.
Labor and Safety Law
Employment
In Taiwan, for the purpose to protect labor rights and interests, strengthen employee-
employer relationships and promote social and economic development, the Labor Standards
Act (جannounced on 30th July 1984 and latest amended on 31st July 2024) (the
“LSA”) provides the minimum standards of the terms and conditions to govern the
employment. Any employment relationship and business/industry applicable to such act shall
comply with the requirements regulated therein, and those terms and conditions of employment
agreement below the minimum standards or contrary to the provisions of the Labor Standards
Act shall be deemed void and unenforceable.
The LSA establishes standards with respect to labor contracts, wages, working hours,
recess and holidays, juvenile workers and female workers, apprentices, retirement,
compensation for occupational accidents, and work rules. Any employer who violates the
provisions of the LSA, as the case may be, will be imprisoned, detained and/or fined.
Furthermore, in addition to the LSA, the Act of Gender Equality in Employment (йʈ
جannounced on 16th January 2002 and latest amended on 16th August 2023), the
Regulations of Leave-Taking of Workers (ۆannounced on 20th March 1985 and
latest amended on 1st May 2023) and other relevant laws and regulations shall also apply.
Labor Pension
In order to protect labors’ livelihood after retirement, consolidate the relations between
employees and employers, and promote social and economic developments, employers are
obligated to fund pension for their employees for full compliance with the Labor Pension Act
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(ૢԷ) (announced on 30th June 2004 and latest amended on 15th May 2019) (the
“LPA”) and the Labor Standards Act. In accordance with Article 7 of the Labor Pension Act,
all domestic employees who are subject to the Labor Standards Act shall be subject to the new
scheme.
Pursuant to Article 14 of the LPA, the contribution rate by an employer to the individual
pension fund accounts at the Bureau of Labor Insurance on a monthly basis shall not be less
than six percent (6%) of employee’s monthly wage and an employee may also contribute per
month, up to six percent (6%) of his/her monthly wages to the pension fund account. The full
amount of the voluntary pension contribution made by an employee may be deducted from the
employee’s taxable income in the year concerned. Based on Article 24 of the LPA, an employee
who is sixty (60) years old or above and whose seniority is more than fifteen (15) years, is
entitled to monthly pension payments; if an employee whose seniority is less than fifteen (15)
years shall be entitled to a lump sum pension payment. Seniority shall be calculated based on
the number of years for which contributions to the pension fund were made.
An employer fails to contribute to the pension on monthly basis or in full for an employee
in accordance herewith, employer is liable for any damages caused to the employee.
Additionally, an employer who is in violation of Article 14 and fails to duly or fully contribute
the amount of labor pension is required to pay penalty at three percent (3%) of the amount of
contribution on a daily basis for the period from the date following the expiration date until the
date preceding the settlement date.
Labor & Health Insurance
According to the Labor Insurance Act (ᎈૢԷ) (announced on 21st July 1958 and
latest amended on 28th April 2021) (the “ LIA”) and the National Health Insurance Act ( Ό͏
جannounced on 9th August 1994 and latest amended on 28th June 2023) (the
“NHIA ”), in order to protect labors’ livelihood and promote social security, employees from
fifteen (15) years old to sixty-five (65) years old who applies to the requirements prescribed
in Article 6 of the LIA as well as the Article 8 of the NHIA shall all be insured under those
program.
The insurance premium of those insurance is calculated based on the insured person’s
salary/payroll and insurance premium rate. After the implementation of the NHIA, which is
compulsory social insurance, aside from the medical payments for ordinary accidents are
handled by the National Health Insurance Administration, existing labor insurance covers other
ordinary accidents including maternity, injury, sickness, disability, old-age, and death benefits.
Any breach of such acts by either an employee or an insured unit will be punished by a
monetary penalty. The employer will be subject to penalty no less than NT$100 and no more
than NT$500; while the insured unit will be imposed a fine between two times to four times
of the insurance premiums the insured unit have failed to pay for the employee, depending on
which provisions of the Labor Insurance Act the insured unit have violated.
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Laws and Regulations Relating to Properties
Trademark
The Trademark Act (جannounced on 6th May 1930 and latest amended on 24th
May 2023) is enacted for protection of the rights of trademark, certification mark, collective
membership mark, collective trademark and the interests of consumers, maintenance of fair
competition, and promotion of development of the industry and commerce.
According to Articles 68 and 70 of the Trademark Act, using a trademark which is
identical with or similar to the registered trademark and used in relation to goods or services
identical with or similar to those for which the registered one is designated, and hence there
exists a likelihood of confusion on relevant consumers and/or knowingly using a trademark
which is identical with or similar to another person’s well-known registered trademark, and
hence there exists a likelihood of dilution of the distinctiveness or reputation of the said
well-known trademark in the course of trade and without consent of the proprietor of a
registered trademark, constitute or will be deemed infringement of the right of such trademark,
or any person who, without the consent of the proprietor of a registered trademark,
manufactures, sells, possesses, displays, exports, or imports labels, tags, packaging, containers,
or service-related articles that bear trademarks the same or similar to said registered trademark
of the identical or similar goods or services in the course of trade for their own use or for
others, shall also be deemed an infringer of the right of such trademark. Companies which
infringe others’ trademark rights will face civil liabilities (Article 69) and criminal charges of
imprisonment for a period not exceeding three years and/or a fine not exceeding NT$200,000
(Article 95). However, according to Article 36, a registered trademark shall not entitle the
proprietor to prohibit a third party from (a) indicating his/her own name, or the term, shape,
quality, nature, characteristic, intended purpose, place of origin, or any other description in
relation to his/her own goods or services, in accordance with honest practices in industrial or
commercial matters and not using it as a trademark; (b) indicating the purpose of use of goods
or services in accordance with honest practices in industrial or commercial matters, where it
is necessary to use the registered trademark to indicate goods or services of the proprietor. It
shall not apply if there exists a likelihood of confusion among relevant consumers as a result
of such use; (c) using where it is necessary for the goods or services to be functional; and (d)
using bona fide, prior to the filing date of the registered trademark, an identical or similar
trademark on goods or services identical with or similar to those for which the registered
trademark is protected, provided that the use is only to the original extent; the proprietor of the
registered trademark is entitled to request the party who use the trademark to add an
appropriate and distinguishing indication.
Patent
Pursuant to the Patent Act (جannounced on 29th May 1944 and latest amended on
4th May 2022), there are three types of patents: invention patents, utility model patents, and
design patents. The respective patent terms are 20, 10, and 15 years, all calculated from the
filing date of a patent application, while the patent rights are actionable from the issue date of
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the patent. A third-party user must obtain consent or a proper license from the patent owner to
use the patent expect for certain specific circumstances provided by law. Otherwise, the use
will constitute an infringement of the patent rights.
As Taiwan is not a member of the Patent Cooperation Treaty (the “ PCT”), it is not
possible to file a national stage patent application in Taiwan of a PCT application. However,
as Taiwan is a member of the WTO and hence subject to the rules of the Paris Convention
incorporated into the TRIPS Agreement, any foreign applicant, whose country of origin is a
WTO member or who has a domicile or a place of business within the territory of a WTO
member jurisdiction, is entitled to claim priority in Taiwan based on his invention patent or
utility model application (including a PCT application) first filed in any member country of the
WTO within 12 months (or 6 months in case of a design application) of the filing date in
Taiwan.
LA WS AND REGULATIONS RELATING TO U.S. EXPORT CONTROLS AND
SANCTIONS
The Export Administration Regulation (the “ EAR”) regulates U.S. export control, and the
Bureau of Industry and Security (the “ BIS”) of the Department of Commerce administers the
EAR. The U.S. export control regime regulates the export, transfer or disclosure of U.S.
products, software, and technology to non-U.S. jurisdictions and non-U.S. persons based on the
nature of the product or technology, as well as the destination, transferee, or end-use of a
specific export or transfer.
The EAR applies to all items (i.e., commodities, software, and technology) that are
“subject to the EAR,” which include not only U.S.-made items or items physically in the
United States, but also to certain foreign-made commodities, namely Non-U.S. made items.
The non-U.S. made items are subject to the EAR if they meet the Direct Foreign Product Rule
or De Minimis Rule.
 Under the Foreign Direct Product Rule, a non-U.S.-made item will be subject to the
EAR if it is:
(a) a direct product of certain U.S.-origin software or technology; or
(b) produced by a plant or a major component of a plant located outside the United
States, where that plant or component is itself a direct product of specified
U.S.-origin software or technology.
The application of Foreign Direct Product Rule to a specific item depends on U.S.
technology and software involved, characteristic of the finished products, intended
destination and end-user or end use of the finished products.
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 Under the De Minimis Rule, a non-U.S.-made item will be subject to EAR if it is
physically incorporated or bundled with “controlled” U.S.-origin content in excess
of a de minimis percentage, which is currently 25% for items exported to China.
EAR restrictions on export, re-export, or transfer of any items subject to the EAR
As long as the item is subject to the EAR, any export, re-export, or transfer of such an
item will be subject to EAR.
For items subject to the EAR, whether a U.S. export license is required depends on (i) the
classification (ECCN (as defined below) or EAR-99) and control reasons, (ii) destination
country, and (iii) end-user/end use.
Items subject to the EAR can be classified into EAR-99 and items with Export Control
Classification Number (“ ECCN ”).
 EAR-99: The non-sensitive products and technology are generally designated as
EAR-99, which are to be controlled if transferred to sensitive destinations, end-users
or end-uses. The EAR-99 can be exported, re-exported, or transferred to most
entities without a license, unless to an embargoed or sanctioned country, a
sanctioned end user, or a prohibited end-use. controlled if transferred to sensitive
destinations, end-users or end-uses.
 Items with ECCNs : Typically, the items with ECCNs are intrinsically sensitive or
strategic goods or technology, and are to be controlled due to such intrinsic
sensitivity for reasons such as anti-terrorism, national security, regional stability and
crime control. For example, generally for items with ECCNs controlled for
“anti-terrorism” reasons, exporting those items to a non-sanctioned entity in China
(which is not an embargo country under the definition of EAR) does not require an
export license.
License applications would be subject to review under varying policies (e.g., presumption
of approval, presumption of denial, or a case-by-case review) as further described in the EAR.
In addition, there are license exceptions available under stated conditions allowing products
with ECCNs to be exported, re-exported, or transferred without a license. For example, as
stated in §740.17 of the EAR, License Exception ENC authorizes export, re-export, and
transfer of encryption items such as 5A002 without a license.
EAR restrictions on certain sanctioned entities
Moreover, the BIS publishes multiple lists of entities and individuals subject to licensing
requirements and other restrictions on transactions involving products subject to the EAR. The
Entity List is a catalogue of individuals and entities subject to specific licensing requirements
for the export, re-export, or transfer of certain products and technology subject to the EAR. The
Entity List identifies the specific licensing requirements. To be specific, generally, for any
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entity designated on the Entity List, export, re-export, or transfer any items subject to the EAR
(including EAR-99) would trigger a license requirement. The BIS licensing policy for many
entities is a presumption of denial of any licensing request.
Therefore, it is essential for U.S. persons and foreign persons (including foreign
companies) to determine if their items are subject to the EAR.
The EAR also specifies ten general prohibitions, including the prohibition of exporting
controlled items subject to the EAR to sanctioned countries, exporting items subject to the
EAR without a proper license, transferring the items to prohibited end-uses or end-users, etc
(the “ General Prohibition 10 ”). The General Prohibition 10 also considers proceeding with
transactions with knowledge that a violation has occurred or is about to occur as a violation of
the EAR. In other words, one (including non-U.S. person) may not sell, transfer, export,
reexport, finance, order, buy, remove, conceal, store, use, loan, dispose of, transport, forward,
or otherwise service, in whole or in part, any item subject to the EAR and exported, reexported,
or transferred (in-country) or to be exported, reexported, or transferred (in-country) with
knowledge that a violation of the EAR has occurred, is about to occur, or is intended to occur
in connection with the item.
EAR restriction on U.S. persons
The EAR also includes certain restrictions on the conduct of U.S. persons applicable
regardless of the involvement of any items subject to the EAR. Under the EAR, U.S. persons
are prohibited from design, development, production, operation, installation, maintenance
(checking), repair, overhaul, or refurbishing of nuclear explosive devices, missiles, chemical
or biological weapons, military-intelligence end use or military-intelligence end user in China,
Russia, or V enezuela; or a country listed in Country Groups E:1 or E:2.
Especially, U.S. persons are required to obtain a license if they know that the items,
regardless of whether they are subject to the EAR, will be exported, re-exported, or transferred
to be used in the development or production of Advanced-node ICs at a facility headquartered
in, or whose ultimate parent company is headquartered in, either Macau or a destination
specified in Country Group D:5 (including China). The U.S. jurisdiction applies to goods,
software and technology that are subject to the EAR and located anywhere in the world.
Impact on the Company
The items that are subject to EAR, while do not require licence to obtain
Certain items procured by the Company, including software (such as EDA) and hardware
(such as storage systems and servers) are originated from the U.S. or meet the Direct Product
Rule or De Minimis Rule, and therefore, are subject to EAR including EAR-99 and items with
ECCNs. As advised by the DLA Piper, for items procured by us that are subject to EAR,
including software and hardware, our procurement of such items which are subject to EAR
would not require a license or would be subject to a license exemption based on the
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classifications provided by the suppliers of such items, because (i) those items are non-
sensitive or relatively less sensitive, (ii) China is not an embargo country as defined by the
EAR or subject to comprehensive controls, and (iii) the Company is not a sanctioned target,
and the end use is not restricted. The procurement amounts of such items and EAR-99 Items
were RMB107.9 million, RMB38.8 million and RMB76.5 million in 2022, 2023 and 2024,
respectively, accounting for 1.93%, 0.89% and 1.45% of the total procurement amount of the
Company during the respective years.
Although the Company is not currently required to obtain a license under EAR to procure
those software and commodities, it remains committed to proactively seeking alternative
products that are not subject to the EAR. The Company will continue to evaluate and, where
feasible, procure substitute software and commodities on commercially reasonable terms,
taking into account their availability in the market.
The items that are not subject to EAR
During the Track Record Period, the Company also procured wafers from its foundry
partners outside of the U.S. To the best knowledge of the Company, those foundry partners may
utilize certain U.S. software, equipment or technologies during the manufacturing process.
However, as advised by DLA Piper, based on the confirmations provided by the foundry
partners and on the Company’s internal compliance measures and analysis, the procured wafers
are not subject to the EAR (i) under the De Minimis Rule as the “controlled” U. S.- origin
content incorporated do not excess 25%, or (ii) under the applicable Foreign Direct Product
Rule as the output, input and end-user/ end use requirement are not met.
U.S. OUTBOUND INVESTMENT RULE
On October 28, 2024, the U.S. Department of the Treasury (“Treasury”) Office of
Investment Security published a final rule (the “Final Rule”) establishing new regulatory
controls on certain technology-related investments by U.S. persons in or related to the People’s
Republic of China, Hong Kong and Macau (“countries of concern”).
Although the OIR is not general regarded as a conventional economic sanctions law, the
restrictions on investment activities by U.S. persons have similar effects to certain sanctions
measures.
The OIR, which became effective on January 2, 2025, implements Executive Order 14105
(“The Outbound Investment Order”) Addressing United States Investments in Certain National
Security Technologies and Products in Countries of Concern” (August 9, 2023).
The OIR applies to U.S. persons engaging in a “covered transaction” involving a “covered
foreign person” that engages in certain “covered activities.” Depending on the nature of the
“covered activity,” a covered transaction may be prohibited (prohibited transactions) or require
notification to Treasury (notifiable transactions).
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Covered activity encompasses activities referred to in the definition of “prohibited
transactions” and “notifiable transactions” and includes research, development, or
manufacturing involving “covered national security technologies and products,” which are
sensitive technologies and products in the semiconductors and microelectronics, quantum
information technologies, and AI sectors that have military, intelligence, surveillance, or
cyber-enabled capabilities.
Generally, activities and technology that are deemed to present the most acute national
security concerns are prohibited, while other designated activities are subject to notification
requirements.
The OIR also defines “excepted transactions” which are excluded from the scope of
“covered transactions” and provides for a mechanism for the Secretary of Treasury to exempt
certain covered transactions from the Rule on a case-by-case basis.
For the impact of the U.S. Outbound Investment Rule on the Company, please see
“Business — The Impact of U.S. Outbound Investment Rule.”
REGULATORY OVERVIEW
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OVERVIEW
The history of the Company began in April 2005, when it was founded by Mr. Zhu
Yiming, an executive Director and the chairman of the Board. In August 2016, the A Shares of
the Company were listed on the Shanghai Stock Exchange under the stock code 603986.SH.
Over the years, the Group has evolved into an IC design house for a diverse range of
chips, including Flash, niche DRAM, MCU, analog chips and sensor chips, as well as a
complete set of systems and solutions, including corresponding algorithms and software.
According to Frost & Sullivan, in terms of sales in 2024, the Group is the only IC design house
that ranks top 10 globally in NOR Flash, SLC NAND Flash, niche DRAM and MCU.
MILESTONES
The following sets out the summary of the Company’s key business development
milestones:
Y ear Milestone
2005 /H1118/H1118/H1118/H1118/H1118/H1118/H1118The Company was established and headquartered in Beijing.
2008 /H1118/H1118/H1118/H1118/H1118/H1118/H1118The first SPI NOR Flash in China was released by the Company.
2013 /H1118/H1118/H1118/H1118/H1118/H1118/H1118The first Arm ® Cortex ® M3 32-Bit MCU in China was released by the
Company.
2015 /H1118/H1118/H1118/H1118/H1118/H1118/H1118The Company completed the AEC-Q100 certification for the first GD25
SPI NOR Flash.
2016 /H1118/H1118/H1118/H1118/H1118/H1118/H1118The A Shares of the Company were listed on the Shanghai Stock
Exchange (stock code: 603986.SH).
2019 /H1118/H1118/H1118/H1118/H1118/H1118/H1118The Company completed the acquisition of 100% equity interest in
Silead.
The Company released the world’s first RISC-V Core 32-bit MCU.
The Company’s GD25 SPI NOR Flash passed AEC-Q100 automotive-
grade certification.
2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118The Company’s 24nm SLC NAND Flash has been unveiled.
The Company launched its first DRAM DDR 4.
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118The Company’s GD5F SPI NAND Flash has passed AEC-Q100
automotive-grade certification.
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118The Company became the first company based in Chinese Mainland to
launch the high-performance MCU based on the Arm
® Cortex ®-M7
architecture.
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Y ear Milestone
The Company obtained ISO 26262 ASIL D process certification.
The cumulative shipment volume of the Group’s automotive-grade
memory exceeded 100 million.
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118The Company obtained the control of XySemi.
GD32H7 STL Software Test Library of the Company obtained TÜV
Rheinland IEC 61508 functional safety certification.
GD25/55 automotive-grade SPI NOR Flash of the Company obtained
ISO 26262 ASIL D certification.
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118The Company established its overseas headquarter in Singapore.
MAJOR SUBSIDIARIES
The following sets out details of the Company’s subsidiaries that are material to the
Group’s operations.
Name of subsidiary
Place of
establishment/
incorporation
Date of
establishment/
incorporation
Equity
interest
attributable
to the
Company
Principal business
activities
GigaDevice Semiconductor (HK)
Limited (ฆཥɿ(ಥ)߅
ʮ̡,“ GigaDevice HK ”) /H1118/H1118
Hong Kong August 4, 2008 100% Sales of chips
GigaDevice Hefei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC March 13,
2014
100% Technology development
and sales of chips
Silead /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC January 27,
2011
100% Research, development
and sales of chips
GigaDevice Shanghai /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC February 16,
2012
100% Research, development
and sales of chips
GigaDevice Semiconductor
Singapore Pte. Ltd.
(“GigaDevice Singapore ”) /H1118/H1118/H1118/H1118/H1118
Singapore November 23,
2020
100% Wholesale of electronic
components
GigaDevice Xi’an /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC November 24,
2017
100% Technology development
and sales of chips
XC Memory /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC July 11, 2024 100% Technology development
and sales of chips
HISTORY AND CORPORATE STRUCTURE
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Name of subsidiary
Place of
establishment/
incorporation
Date of
establishment/
incorporation
Equity
interest
attributable
to the
Company
Principal business
activities
XySemi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC February 27,
2009
38.07% (1) Research, development
and sales of chips
Shenzhen Outer Harbor Technology
Development Co., Ltd. ( ଉέ̹̮
ʮ̡,“ Outer
Harbor ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC July 22, 2013 100% Investment holding
CreMemory Technology /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC July 31, 2024 77.78% Technology development
and sales of chips
Note:
(1) The Company is entitled to exercise 70% of the voting rights at the general meetings of XySemi pursuant to
the Stony Creek Capital Undertaking and the XySemi Acting-in-Concert Agreement, and XySemi is therefore
a non-wholly-owned subsidiary of the Company. See “— Acquisition, Merger and Disposal” below.
MAJOR SHAREHOLDING CHANGES OF THE COMPANY
Early Development and Conversion into a Joint Stock Company
On April 6, 2005, the Company was established under the laws of the PRC as a limited
liability company with an initial registered capital of RMB2,000,000 and was held as to 60%
by Mr. Zhu Yiming and 40% by Beijing Tus V enture Incubator Co., Ltd. (௴ุྷʷ
ʮ̡), formerly known as Beijing Tsinghua Science Park Incubator Co., Ltd. ( ̏ԯ૶ശ
ʮ̡), an Independent Third Party. Between 2005 and 2012, the Company
underwent several rounds of capital increases and equity transfers, upon completion of which
its registered capital increased to RMB59,885,024.
On December 28, 2012, the Company was converted into a joint stock company. Upon
completion of the conversion, the Company had a total share capital of RMB75,000,000
divided into 75,000,000 Shares, which were held as to 16.29% by Mr. Zhu Yiming, 14.11% by
Insight Power Investments Limited (ʮ̡), an Independent Third Party, 13.95%
by InfoGrid Limited, 11.89% by Tus Zhonghai V enture Capital Limited (ʕऎ௴ุҳ༟Ϟ
ʮ̡) and 43.76% by 16 other then Shareholders of the Company, each holding less than
10% of the Shares and being an Independent Third Party at the time of the conversion.
HISTORY AND CORPORATE STRUCTURE
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Listing on the Shanghai Stock Exchange
In August 2016, the A Shares of the Company were listed on the Shanghai Stock
Exchange (stock code: 603986.SH) (the “ A-Share Listing ”). The Company offered a total of
25,000,000 A Shares under the A-Share Listing, representing 25% of the Company’s enlarged
share capital immediately following the completion of the A-Share Listing. Immediately upon
the completion of the A-Share Listing, the share capital of the Company increased to
RMB100,000,000.
Issuance and Private Placement of A Shares in 2019
As approved by the Shareholders in May 2018 and May 2019 and the CSRC in May 2019,
the Company (i) issued certain A Shares (the “ 2019 A Share Issuance ”) as the share
consideration for the Company’s acquisition of the entire equity interest in Silead (the “ Silead
Acquisition ”); and (ii) conducted a private placement of its A Shares (the “ 2019 A Share
Placement ”) to raise funds for various development initiatives, including the payment of the
cash consideration for the Silead Acquisition, implementation of advanced technology research
and development projects and construction of a research and development center.
Pursuant to the 2019 A Share Issuance, a total of 22,688,014 A Shares were issued to 11
then shareholders of Silead, each of whom was an Independent Third Party, as the share
consideration of RMB1,445 million for the Silead Acquisition. Pursuant to the 2019 A Share
Placement, a total of 12,956,141 A Shares were issued in the placement to six investors, each
of whom was an Independent Third Party. The 2019 A Share Placement raised net proceeds of
approximately RMB935.9 million. Following the completion of the 2019 A Share Issuance and
the 2019 A Share Placement, the Company’s total issued share capital increased to
RMB320,538,643.
Private Placement of A Shares in 2020
As approved by the Shareholders in October 2019 and March 2020 and the CSRC in April
2020, the Company conducted a private placement of its A Shares to raise funds for the
research and development and industrialization project of the Group’s DRAM and the
supplementation of the Group’s working capital (the “ 2020 A Share Placement ”). Pursuant to
the 2020 A Share Placement, a total of 21,219,077 A Shares were issued in the placement to
five investors, each of whom was an Independent Third Party. The 2020 A Share Placement
raised net proceeds of RMB4,282.4 million. Following the completion of the 2020 A Share
Placement, the Company’s total issued share capital increased to RMB470,780,652.
HISTORY AND CORPORATE STRUCTURE
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ACTING-IN-CONCERT UNDERTAKING
InfoGrid Limited was established by independent investors including current and former
employees of the Group and other investors. In order to enhance the actual control of Mr. Zhu
Yiming in the Company to maintain the ownership stability of the Company, in 2013, InfoGrid
Limited issued the Acting-in-Concert Undertaking, as supplemented and confirmed in 2017 and
2019, respectively, pursuant to which InfoGrid Limited has undertaken, among others:
(i) to act in concert with Mr. Zhu Yiming when voting at general meetings of the
Company;
(ii) to procure the Director(s) recommended by InfoGrid Limited (if any) to act in
concert with Mr. Zhu Yiming when voting at the Board meetings of the Company;
(iii) not to seek actual control of the Company;
(iv) not to enter into acting-in-concert agreements or similar acting-in-concert
undertakings with any Shareholders other than Mr. Zhu Yiming; and
(v) that the undertaking shall be irrevocable, and it will bear any actual losses incurred
by the Company arising from any breach of the undertaking.
ACQUISITION, MERGER AND DISPOSAL
On November 5, 2024, the Company entered into an equity acquisition agreement
(the “ Equity Acquisition Agreement ”) with Hefei SCVC, Stony Creek Capital, Hefei
Guozheng and all 23 then shareholders of XySemi (collectively, the “ Transferors ”), pursuant
to which the Company, Hefei SCVC, Stony Creek Capital and Hefei Guozheng agreed to
acquire 38.07%, 18.07%, 12.05% and 1.81% of the equity interest in XySemi from the
Transferors at a consideration of RMB316,000,000, RMB150,000,000, RMB100,000,000 and
RMB15,000,000, respectively (the “ XySemi Acquisition ”). The considerations were
determined after arm’s length negotiations among the parties with reference to the value of
XySemi as of June 30, 2024 as appraised by an independent valuer. XySemi is mainly engaged
in the research and development, design and sales of analogue chips, which mainly include
lithium battery protection chips and power management chips and are applied in various
general fields such as mobile batteries and smart wearables.
Stony Creek Capital has issued the Stony Creek Capital Undertaking, pursuant to which
it has undertaken that from the closing date of the XySemi Acquisition and up to the date when
Stony Creek Capital no longer holds the equity interest in XySemi, it voluntarily and
irrevocably entrusts all of its shareholder’s rights in XySemi to the Company, including the
voting rights and nomination and proposal rights but other than the income rights and disposal
rights.
HISTORY AND CORPORATE STRUCTURE
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On November 5, 2024, the Company entered into the XySemi Acting-in-Concert
Agreement with Hefei SCVC and Hefei Guozheng, pursuant to which Hefei SCVC and Hefei
Guozheng agreed that for five years from the closing date of the XySemi Acquisition, they will
act in concert with the Company when making proposals to or voting at the general meetings
of XySemi on matters in relation to XySemi. The term of the XySemi Acting-in-Concert
Agreement shall be automatically extended for one year in each successive year until any party
gives a notice of termination in writing no later than one month prior to the expiry of the
XySemi Acting-in-Concert Agreement.
On December 12, 2024, Hefei SCVC noticed the parties to the XySemi Acquisition that,
pursuant to the relevant arrangements agreed in the transaction agreements including, among
others, the Equity Acquisition Agreement and the XySemi Acting-in-Concert Agreement, Hefei
SCVC has appointed Hefei Guojing to assume all of the rights and obligations of Hefei SCVC
under the relevant agreements.
Upon completion of the XySemi Acquisition on December 18, 2024, the Company is
entitled to exercise 70% of the voting rights at the general meetings of XySemi pursuant to the
Stony Creek Capital Undertaking and the XySemi Acting-in-Concert Agreement, and XySemi
has become a non-wholly-owned subsidiary of the Company. As none of the applicable
percentage ratios as defined under the Listing Rules in respect of the XySemi Acquisition
exceeds 25%, the pre-acquisition financial information of XySemi is not required to be
disclosed pursuant to Rule 4.05A of the Listing Rules.
The XySemi Acquisition has been properly and legally completed and settled, and all
relevant approvals required from the relevant authorities have been obtained.
Throughout the Track Record Period and up to the Latest Practicable Date, the Company
did not conduct any material acquisitions, mergers or disposals.
LISTING ON THE SHANGHAI STOCK EXCHANGE AND REASONS FOR THE H
SHARE LISTING
Since August 2016, the A Shares of the Company have been listed on the Shanghai Stock
Exchange. The Directors confirm that, during the Track Record Period and up to the Latest
Practicable Date, the Company has complied with all laws and regulations, in all material
respects, applicable to its A-share Listing. To the best knowledge of the Directors, there are no
material matters in relation to the compliance record of the Company on the Shanghai Stock
Exchange that should be brought to the attention of the Stock Exchange or potential investors
of the Global Offering. As advised by the PRC Legal Advisor, during the Track Record Period
and up to the Latest Practicable Date, the Company has not been subject to any material
administrative penalties or regulatory measures imposed by the CSRC, the Shanghai Stock
Exchange or other PRC securities regulatory authorities. Based on the independent due
HISTORY AND CORPORATE STRUCTURE
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--- page 184 ---
diligence conducted by the Joint Sponsors and the PRC Legal Advisor’s view above, no
material matter has come to the Joint Sponsors’ attention that would cause them to disagree
with the Directors’ confirmation with regard to the compliance records of the Company on the
Shanghai Stock Exchange.
The Company seeks to list its H Shares on the Stock Exchange to deepen its strategic
layout of globalization, accelerate the development of its overseas business, promote its
international brand image and further enhance its core competitiveness. See “Business — Our
Strategies” and “Future Plans and Use of Proceeds” in this prospectus for more details.
PUBLIC FLOAT AND FREE FLOAT
Pursuant to Rules 8.08(1) (as amended and replaced by Rule 19A.13A) of the Listing
Rules, as the Company has Shares apart from the H Shares for which the Listing is sought, the
H Shares for which the Listing is sought that are held by the public, at the time of the Listing,
must (a) represent at least 10% of the Company’s total number of issued Shares (excluding
treasury shares); or (b) have an expected market value of not less than HK$3 billion.
It is expected that upon Listing (assuming the Offer Size Adjustment Option and the
Over-allotment Option are not exercised and no additional Shares are issued pursuant to the
Share Incentive Plans), based on an Offer Price of HK$132.00 per H Share, being the low end
of the indicative Offer Price range, the market value of the H Shares that are held by the public
is approximately HK$3,816.9 million, which is higher than the prescribed market value of the
H Shares required to be held by the public of HK$3 billion under Rule 19A.13A(2) of the
Listing Rules, thereby satisfying Rule 8.08(1) (as amended and replaced by Rule 19A.13A) of
the Listing Rules.
Based on an Offer Price of HK$132.00 per H Share, being the low end of the indicative
Offer Price range, the Company will satisfy the free float requirement under Rule 8.08A (as
amended and replaced by Rule 19A.13C) of the Listing Rules.
HISTORY AND CORPORATE STRUCTURE
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CORPORATE STRUCTURE
Corporate Structure Immediately Before the Global Offering
The following chart sets forth the shareholding and corporate structure of the Group immediately before the Global Offering:
Other
subsidiaries(5)XC MemoryGigaDevice
Xi’an
GigaDevice
Singapore
GigaDevice
ShanghaiSileadGigaDevice
Hefei
GigaDevice
HK Outer Harbor CreMemory
Technology(4)XySemi(3)
Mr. Zhu
Yiming(1)
InfoGrid
Limited(1)
The Company
Other A
Shareholders(2)
100% 100% 100% 100% 100%
6.85% 1.95% 91.19%
100% 100% 38.07% 100% 77.78%
Notes:
(1) As of the Latest Practicable Date, InfoGrid Limited was held as to 82.82% by Mr. Shu Qingming, an Independent Third Party. The remaining equity inte rest in InfoGrid Limited
was held by 13 other shareholders, each an Independent Third Party, among which three are current or former employees of the Group, one is a shareholdin g platform controlled
by 20 current and former employees of the Group who are Independent Third Parties, and nine are early investors of InfoGrid Limited. InfoGrid Limited h as issued the
Acting-in-Concert Undertaking, pursuant to which InfoGrid Limited has undertaken, among others, to act in concert with Mr. Zhu Yiming when voting at general meetings of
the Company. See “— Acting-in-Concert Undertaking” in this section for details.
(2) As of the Latest Practicable Date, 603,020 A Shares were held by the Company as treasury shares, which did not carry any Shareholders’ rights, inclu ding but not limited to
voting rights at the Shareholders’ meeting and dividend rights.
HISTORY AND CORPORATE STRUCTURE
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(3) As of the Latest Practicable Date, the remaining equity interest in XySemi was held as to 18.07% by Hefei Guojing, 14.32% by Jian Tan ( ᗈ਄), 12.13% by Y anting Y ang ( เ
ዲణ), 12.05% by Stony Creek Capital, 1.81% by Hefei Guozheng, 0.63% by Jiang Jinmao (߱0.53% by Miao Miao (ߴ0.43% by Zhang Yijian ( ੵ˸Ԉ), 0.41% by
Chen Fushun ( ௓၅න), 0.35% by Li Fuping ( ҽ၅̻), 0.29% by Wang Haiyan ( ˮऎᜮ), 0.28% by Jia Peng ( ༠ᘄ), 0.24% by Liu Y unxia ( ᄎථᒳ), 0.17% by Suzhou Saichi
Information Consulting Partnership (Limited Partnership) (ፔ༔ΥྫΆุ(Υྫ)), 0.14% by Xu Liuquan (Ό) and 0.07% by Li Xiaodong (؇To the
best knowledge of the Company, each of the aforementioned shareholders of XySemi is an Independent Third Party. The Company is entitled to exercise 70 % of the voting rights
at the general meetings of XySemi pursuant to the Stony Creek Capital Undertaking and the XySemi Acting-in-Concert Agreement. See “— Acquisition, Me rger and Disposal”
above for details.
(4) As of the Latest Practicable Date, the remaining equity interest in CreMemory Technology was held as to 8.33% by Beijing CreMemory Zhifan Enterpri se Management
Partnership (Limited Partnership) (ঀ౽ωΆุ၍ଣΥྫΆุ(Υྫ), “ CreMemory Zhifan ”), 8.33% by Beijing CreMemory Zhiling Enterprise Management
Partnership (Limited Partnership) (Άุ၍ଣΥྫΆุ(Υྫ), “ CreMemory Zhiling ”) and 5.56% by Beijing CreMemory Zhikuo Enterprise Management
Partnership (Limited Partnership) (ঀ౽ᒪΆุ၍ଣΥྫΆุ(Υྫ), “ CreMemory Zhikuo ”). Mr. Hu Hong is the general partner of each of CreMemory Zhifan,
CreMemory Zhiling and CreMemory Zhikuo.
(5) Other subsidiaries include over 20 subsidiaries established in various jurisdictions as of the Latest Practicable Date.
HISTORY AND CORPORATE STRUCTURE
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Corporate Structure Immediately After the Global Offering
The following chart sets forth the shareholding and corporate structure of the Group immediately after the completion of the Global Offering
(assuming the Offer Size Adjustment Option and the Over-allotment Option are not exercised and no additional Shares are issued pursuant to the
Share Incentive Plans):
Other
subsidiaries(5)XC MemoryGigaDevice
Xi’an
GigaDevice
Singapore
GigaDevice
ShanghaiSileadGigaDevice
Hefei
GigaDevice
HK Outer Harbor CreMemory
Technology(4)XySemi(3)
Mr. Zhu
Yiming(1)
InfoGrid
Limited(1)
The Company
Other A
Shareholders(2)
100% 100% 100% 100% 100%
6.57% 1.87% 87.41% 4.15%
H Shareholders
100% 100% 38.07% 100% 77.78%
Notes:
(1) to (5) See “— Corporate Structure — Corporate Structure Immediately Before the Global Offering” in this section.
HISTORY AND CORPORATE STRUCTURE
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OVERVIEW
Who We Are
We are an IC design house for a diverse range of chips. We provide customers with a wide
range of chips, including Flash, niche DRAM, MCU, analog chips and sensor chips that can
be used in consumer electronics, automobiles, industrial applications (such as industrial
automation, energy storage and battery management), PC and servers, IoT, network
communications and other fields to meet various demands, as well as a complete set of systems
and solutions, including corresponding algorithms and software. According to Frost &
Sullivan, in terms of sales in 2024, we are the only IC design house that ranks top 10 globally
in all markets of NOR Flash, SLC NAND Flash, niche DRAM and MCU. The sales of specialty
memory chips and MCU contributed the substantial majority of our revenue in each year during
the Track Record Period. We adopt a fabless business model, focusing on IC design and R&D
to maintain our technological advantages, while partnering with quality foundries and OSA T
partners to ensure manufacturing excellence and scalability and high-quality products.
With continuous innovation, effective supply chain management, a strict quality control
system and timely customer response capabilities, we have formed a positive cycle of
“innovation — product — customer”. Meanwhile, we continue to explore market demands with
high-quality customers across the globe, complete product definition, and provide the optimal
“Sense, Memory, Compute, Control and Connectivity” ( ชπၑછஹ) synergistic ecological
solutions with our diverse product portfolio.
Founded in 2005, we have been deeply involved in the specialty memory chip industry
for 20 years and the MCU field for 14 years. We have become a leading specialty memory chip
and MCU company in Chinese Mainland and have created specialty memory chip and MCU
brands with global influence. We always focus on value creation for customers and have
formed a high-quality customer base across the globe. According to Frost & Sullivan, in terms
of sales in 2024:
 NOR Flash . We ranked second globally and first in Chinese Mainland with a global
market share of 18.5%.
 SLC NAND Flash . We ranked sixth globally and first in Chinese Mainland with a
global market share of 2.2%.
 Niche DRAM . We ranked seventh globally and second in Chinese Mainland with a
global market share of 1.7%.
 MCU. We ranked eighth globally and first in Chinese Mainland with a global market
share of 1.2%.
 Fingerprint sensor chip . We ranked second in Chinese Mainland with a market
share in Chinese Mainland of around 10%.
BUSINESS
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Company C and Company F, which ranked first in the global SLC NAND Flash market
and niche DRAM market in terms of sales in 2024, respectively, achieved a market share of
35.2% and 30.8% in the respective market. See “Industry Overview - Analysis of the
Competitive Landscape of the Company’s Industries.”
Our Business
Our diverse product portfolio forms the foundation of our “Sense, Memory, Compute,
Control and Connectivity” synergistic ecological solutions. Our proprietary chips and
innovative solutions are widely applied in various smart devices, exhibiting vast future
prospects.
Specialty Memory Chips: Diverse Product Portfolio Covering Nor Flash, NAND Flash and
Niche DRAM with Industry Breakthroughs
Our specialty memory chips include three product lines: NOR Flash, NAND Flash and
niche DRAM, forming a broad matrix of advanced products that can meet customers’ demands
for capacity, voltage and packaging for different applications. We have achieved wide coverage
in consumer electronics, industrial applications (such as industrial automation, energy storage
and battery management), communications, automotive electronics and other fields.
For Nor Flash, we focus on the mainstream SPI NOR Flash. In 2019, we launched the first
ultra-high-speed 8-channel SPI NOR Flash product in Chinese Mainland. The data throughput
rate was around five times compared to that of the then existing products, making it one of the
highest-performance NOR Flash products in the industry at that time. In 2020, we were the first
in Chinese Mainland to roll out high-performance SPI NOR Flash with a capacity of up to 2Gb.
This made us the first Chinese Mainland-based company to achieve full product line coverage
from 512Kb to 2Gb. In 2024, we launched the first low-power series SPI NOR Flash in Chinese
Mainland, with 1.2V low voltage and ultra-low power mode, significantly improving the
endurance of small-capacity battery devices. In 2025, we were one of the first movers to
achieve large-scale mass production of 45nm node SPI NOR Flash with a significant
improvement in storage density, and continued to maintain technological advantages and
market position.
For NAND Flash, we focus on SLC NAND Flash, which features high efficiency, high
reliability and low power consumption. They are mainly designed for industrial control,
automotive electronics, communications equipment and other application scenarios that have
strict requirements on duration, stability and reliability.
Our niche DRAM includes DDR3L/DDR4/LPDDR4, which feature low power
consumption and small size. They are mainly used in various fields such as set-top boxes, TVs,
network communications, smart home devices, smart wearables and infotainment systems.
According to Frost & Sullivan, with our strong supply chain capabilities, the growth of our
share in the global niche DRAM market is accelerating. The rise of edge-AI demand has put
forward new requirements for customized memory solutions. We endeavor to provide
BUSINESS
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customers with more customized memory solutions in terms of performance and energy
consumption, ultimately reshaping the new form of edge storage. In July 2024, we established
a subsidiary, CreMemory Technology, to keep abreast of customer needs and actively explore
new technologies, new businesses, new markets and new products, including customized
memory solutions.
MCU: Building a Comprehensive Portfolio of MCU with Wide Selection of over 700 Products
We focus on 32-bit MCU based on ARM
® and RISC-V structures. We provide MCU
featuring high performance, low power consumption and a high cost-to-performance ratio. Our
MCU supports a wide range of applications, including industrial applications (such as
industrial automation, energy storage and battery management), consumer electronics and
handheld devices, automotive electronics (such as car navigation, T-BOX, instrument and
infotainment systems) and computing. According to Frost & Sullivan, we are the world’s first
company to launch and mass-produce 32-bit general-purpose MCU based on the RISC-V
structure and the first company based in Chinese Mainland to launch the high-performance
MCU based on the Arm
® Cortex ®-M7 architecture.
We continue to build a comprehensive portfolio of MCU to offer customers with a wide
selection. Based on the existing 63 series and more than 700 products, we endeavor to further
improve R&D and engineering efficiency and continue to broaden our product lines. With years
of technology accumulation, we aim to accelerate the development of core technologies and
continue to deepen our presence in the industrial applications (such as industrial automation,
energy storage and battery management), automobile and other fields. Relying on flexible
customization and rapid customer response capabilities, we stepped into the global mid- and
high-end markets.
Analog and Sensor Chips: Organic Growth Combined with Strategic Acquisition
We primarily offer analog chips for general power supplies (such as DC-DC and LDO),
special power supplies (such as headphone charging box power supplies and sweeping robot
power supplies), motor drive products, and temperature and humidity sensors. In 2024, we
acquired XySemi, a leading company in the lithium battery protection sector, to create strategic
synergies with our own analog chips business in terms of technology, products, marketing,
sales and supply chain. Our sensor chip offering mainly includes fingerprint recognition chips
and touch sensor chips. We aim to continue to promote product optimization and upgrading and
further expand our product portfolio in PC, wearable, mobile health, IoT and other fields.
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Based on our four key product offerings and industry insights, we have built a diversified
product portfolio that forms the foundation of our “Sense, Memory, Compute, Control and
Connectivity” synergistic ecological solutions. This enables us to quickly respond to
customers’ needs, further enhance customer stickiness and improve our overall competitiveness
and brand influence.
Product Ecology of
“Sense, Memory, Compute,
Control and Connectivity”
Analog chips Flash
Memory
Control
Compute
Connectivity
Sense
Sensors
DRAM
Wireless
connectivity
 chips MCU
Signalinterconnectivity
Sensingofexternalinformation Memory of key information
Computingcontrolsystem
Our Market Opportunities
Edge AI is growing rapidly. According to Frost & Sullivan, 2025 marks the start of a
major boom in edge computing power. Edge AI expands how AI can be applied by turning
traditional devices into smart systems capable of making their own decisions. It is also
accelerating the adoption of AI in key industries such as consumer electronics, industrial
applications (for example, industrial automation, energy storage and battery management),
automotive and humanoid robotics. This shift is creating new opportunities for companies
across these sectors. As our products play an important role for enabling real-time, low-power
and reliable AI interference at the edge, the rapid growth trend of AI is driving the demand for
our products.
 Consumer electronics. The incorporation of AI features is the pivotal force driving
the upgrade of consumer electronics. According to Frost & Sullivan, by 2029, global
shipment volume of AI smartphones is expected to reach 774.0 million units with a
penetration rate of 54.0%. Meanwhile, the global shipment volume of AI PC is
expected to reach 215.3 million units, making AI PC the dominant force in the PC
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sector. Edge AI devices integrate local computational power, immediate response
time, and privacy protection instead of relying on the cloud-based substantial
computational power. Our NOR Flash is a key component supporting the rapid
responsiveness of devices, particularly those with AI functionalities, due to its
features of high-speed reading, power-off data retention and high reliability. Our
customized memory solutions can meet customers’ needs in terms of performance
and power consumption. Our MCU can potentially be the hardware-level
cornerstone of wearables such as AI glasses due to their high energy efficiency and
high integration that leads to smaller sizes. As the penetration rate of AI in consumer
terminals increases, our NOR Flash, customized memory solutions, MCU and other
product lines are expected to experience significant growth.
 Industrial applications. AI reconstructs the production, management and service
chains in industrial setups through the integration of intelligent algorithms, big data
analytics and automation technologies, making industry more efficient, more
flexible, more intelligent and greener. Our high-performance MCU supports
real-time AI inference capabilities, utilizing deep convolutional neural network
algorithms. They have been widely applied in scenarios such as large-scale
industrial energy storage BMS and AI-based DC arc detection in the digital energy
sector.
 Automotive. As automotive electronics technology evolves rapidly, automotive
chips have emerged as crucial factors in achieving intelligent vehicle systems and
superior performance efficiency. According to Frost & Sullivan, the penetration rate
of EV and smart cars is expected to increase from 20.6% and 57.7% in 2024 to
39.7% and 92.4% in 2029, respectively. As the automotive industry embraces
electrification and smart technologies, there has been a significant uptick in the
demand for MCU, NOR Flash and niche DRAM, which in turn propels the market
demand for our automotive-grade chips.
 Embodied AI. The market for embodied AI remains at a nascent stage but is
expected to have strong growth potential. According to Frost & Sullivan, embodied
AI is expected to become the third major growth driver for semiconductor end
markets, following smartphones and automobiles. It relies heavily on memory chips
with high reliability and low latency, while robotic joint control involves extensive
and complex deployment of MCU. These trends are expected to create significant
growth potential for specialty memory chips and MCU.
Looking ahead, as the penetration rate of various edge AI devices increases, industry
players with diversified product portfolio and comprehensive service capabilities will claim the
high ground in the competition. With our diversified product portfolio and “Sense, Memory,
Compute, Control and Connectivity” synergistic ecological solutions, we are able to rapidly
respond to customers’ evolving needs. This endows us with the vantage point in capturing the
significant growth potential brought by the AI revolution.
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OUR STRENGTHS
We believe the following advantages position us well to seize future industry
opportunities and achieve sustained growth.
Our Diverse Range of Chip Design and Strong R&D capabilities
We are an IC design house for a diverse range of chips covering NOR Flash, SLC NAND
Flash, niche DRAM, MCU, analog chips and sensor chips. Leveraging our diverse range of
chip design and strong R&D capabilities, we are able to develop a comprehensive product
portfolio, which strengthens our core competitiveness and enhance our brand influence in the
market. Over the years, we have achieved remarkable accomplishments across various business
areas. Our key achievements include the following:
 In 2008, we successfully developed the first 8Mb SPI NOR Flash chip in Chinese
Mainland, filling a domestic technology gap and breaking monopolies by foreign
and Taiwan-based companies in this field.
 In 2019, we launched and mass-produced the world’s first 32-bit general-purpose
MCU product based on a RISC-V architecture.
 In 2020, we were the first company based in Chinese Mainland to roll out
high-performance SPI NOR Flash with a capacity of up to 2Gb, which became the
preferred solution for code storage in IoT devices.
 In 2022, we were the first company based in Chinese Mainland to launch 1.2V
low-voltage, ultra-low-power consumer-grade SPI NOR Flash, which significantly
reduces operating power consumption and effectively extends device battery life. It
meets the industry’s evolving requirements for lower voltage and lower power
consumption associated with advanced controller processes.
 In 2023, we were the first company based in Chinese Mainland to launch
high-performance MCU based on the Arm
® Cortex ®-M7 architecture.
 In 2025, we were one of the first movers to achieve large-scale mass production of
45nm node SPI NOR Flash with a significant improvement in storage density, and
continued to maintain technological advantages and market position.
According to Frost & Sullivan, in terms of sales in 2024, we ranked second globally and
first in Chinese Mainland in terms of NOR Flash, sixth globally and first in Chinese Mainland
in terms of SLC NAND Flash, seventh globally and second in Chinese Mainland in terms of
niche DRAM, eighth globally and first in Chinese Mainland in terms of MCU, and second in
Chinese Mainland in terms of fingerprint sensor chips.
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We believe that R&D and technological innovation are critical to maintaining our
competitive advantages and market position we achieved. We possess strong R&D capabilities
and have devoted substantial resources to R&D efforts. From 2022 to 2024, our cumulative
R&D investment amounted to approximately RMB3.4 billion, and our R&D spending has
continued to grow steadily. As of June 30, 2025, we had 1,556 experienced technical
employees, accounting for 73.2% of our total number of employees as of the same date. As of
June 30, 2025, approximately 57.5% of our employees held a master’s degree or above. This
R&D talent pool provides a solid foundation for product iteration and the continuous upgrading
of integrated product solutions. We held 1,016 registered patents in Chinese Mainland as of
June 30, 2025, making us one of the largest patent portfolio among IC design houses in China’s
memory and MCU sectors, according to Frost & Sullivan.
A Stable and Thriving Global Partnership Ecosystem and an Increasingly Deepened
Global Presence
As a fabless IC design house, we have built a stable and thriving system on the three
pillars below:
 Large and Loyal High-Quality Customer Base. We adopt a market strategy that
combines direct sales and distributorship to maximize sales efficiency. For direct
sales, leveraging our technology and diversified product portfolio and
comprehensive solutions, we have established deep cooperation with high-quality
global customers, continuously enhancing our technological capabilities and
industry insights, and building strong global brand recognition. For distributorship,
we expand our customer base client through an extensive and high-quality
distributor network. During the Track Record Period, we served over 10,000 clients
in aggregate across the globe.
 Extensive and Deep Supply Chain Collaboration. We integrate the diverse product
and application requirements of downstream customers and have formed mutually
beneficial, trusted and collaborative relationships with 11 quality foundries and 26
OSA T providers. This has established our key competitive advantages in the
industry chain: (i) beyond IC design, we dedicate resources to jointly develop
optimized production processes with foundries tailored for our products,
collaboratively establishing Design for Manufacturability (DFM) and Design for
Reliability (DFR) rules suitable for our products, resulting in strong integration
capabilities between process design and manufacturing; (ii) through sharing industry
insights, technical exchanges and collaborative custom development, we contribute
to upstream industry advancements in areas such as chip architecture upgrades,
process technology evolution and innovation, securing preferential and
comprehensive support from the supply chain; and (iii) we have strategically
developed both domestic and overseas global supply chain systems to meet the
demands of customers across the globe, ensuring supply chain resilience.
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 Increasingly Deepened Global Presence. We are committed to expanding our
business globally. We have established a global sales network comprising
distributors and representatives in over 40 countries or regions. In addition to
product sales, we have established dedicated service networks in the United States,
South Korea, Japan, the United Kingdom, Germany and Singapore to ensure service
responsiveness. We have also expanded our overseas supply chain partnerships to
enable high-quality and efficient delivery. Furthermore, we have built an
international team composed of sales and marketing personnel and engineers to
provide localized services and support our sales and service network. This team is
capable of gathering and responding to the latest market information, ensuring
timely responses to customer needs.
Exceptional Supply Chain and Service Capabilities, Enabling Efficient and High-quality
Delivery
We have established exceptional supply chain capabilities, along with a rigorous quality
management system. Additionally, we have built a global service network to ensure timely
support and enable large-scale, efficient and high-quality delivery.
 Reliable Product Quality. Flash and MCU are key components in electronic devices.
Any failure could lead to severe consequences such as system startup failures.
Hence, the reliability and quality of these chips are the primary criteria for customer
evaluation and key to our business sustainability. We implement rigorous quality
management processes covering our entire business to safeguard customer interests
at every stage. We vigorously promote company-wide implementation of the
AEC-Q004 Zero Defects Guiding Principles to ensure product quality and
reliability. All relevant tests are conducted in accordance with JEDEC, AEC-Q100,
and other industry standards.
 Comprehensive Quality Management and Certification System. We have been
certified under ISO 9001. For automotive quality management, we comply with the
IA TF 16949 standard to meet stringent automotive application requirements and
have obtained the ISO 26262:2018 certification for automotive functional safety at
the highest ASIL D level.
Forward-looking Management Team and an Engineer Culture Surrounding Continuous
Innovation
Our management team possesses extensive industry experience and a global perspective,
working collaboratively to drive the company’s strategic vision. Our founder, Chairman and
Executive Director, Mr. Zhu Yiming, is a leader in the memory chip industry. Our vice
Chairman, Executive Director and President, Mr. He Wei, is a seasoned expert in the IC
industry, formerly serving at SMIC. Mr. He Wei joined us in 2009 and has served in various
roles including deputy general manager, acting general manager and general manager. Our
Executive Director and vice President, Mr. Hu Hong, a seasoned expert in memory chips, has
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held multiple positions including engineer, department manager, director and division head,
leading the development of several product lines with deep expertise in IC design and testing.
Our highly stable management team members average over 15 years of industry experience,
combining diverse professional backgrounds with rich corporate management expertise. They
possess profound insights into global industry trends and customer needs. The management
team also includes seasoned professionals from leading global technology companies, playing
a pivotal role in maintaining our innovative edge and technological proficiency.
We uphold a pragmatic spirit and embody the corporate values and engineer culture of
“excellence, teamwork, open innovation, goal-driven, integrity and accountability.”
Prioritizing talent, we have established comprehensive systems for training, motivation and
promotion, cultivating a capable and forward-looking management team. As of June 30, 2025,
we had 1,556 experienced technical employees, accounting for 73.2% of our total number of
employees as of the same date. Our strong cultural foundation and unwavering commitment to
mission fulfillment continue to propel us forward with great momentum.
OUR STRATEGIES
We are committed to becoming an excellent world-class technology company. To achieve
this goal, we will implement the following strategies.
Fully Embrace AI to Seize the Unprecedented Opportunities in Industry Development
According to Frost & Sullivan, AI development is driving the expansion of demand in the
semiconductor industry. Both globally and within China, AI development has entered a new
phase of accelerated penetration. As more AI-powered end products emerge and become
widespread, AI is expected to serve as the core driver and powerful engine of the growth of the
industry. We will adopt AI as a strategic driver, integrating it throughout our “Product —
Ecosystem — Efficiency Enhancement” triad strategy, detailed as follows:
 AI Product Innovation. We aim to closely follow the evolving market demands
driven by AI’s penetration into intelligent devices. Through both organic growth and
strategic expansion, we plan to proactively develop frontier technologies and
products that are widely applied in edge AI, such as MCU, SoC, customized memory
solutions and connectivity, thereby fully capitalizing on the unprecedented
opportunities brought by AI development.
 AI Ecosystem Expansion. We aim to continuously enhance our AI-related
ecosystem, a diverse portfolio of products and solutions applicable to AI scenarios,
through internal incubation, investments, mergers and acquisitions, customized
services and collaborative development. By working closely with upstream and
downstream partners, we plan to jointly build a robust AI ecosystem, further
strengthen customer loyalty and establish strong ecosystem barriers.
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 AI-Driven Platform Efficiency. We aim to empower various internal departments
with general AI technologies by developing AI middle platforms, which are
comprehensive AI-empowered operation management systems, across R&D, supply
chain, marketing and other functions. This comprehensive approach aims to enhance
operational efficiency, enable advanced data analytics and intelligent decision-
making, and support the company’s medium- to long-term growth.
Diversification Strategy and Multi-track Growth Underpinning Stable and Sustainable
Operations
We have consistently pursued a strategy of diversification and multi-track growth in both
product portfolio planning and downstream application expansion. Our business is divided into
three groups — mature, growth and incubating — with tailored development roadmaps and
performance targets for each. By allocating resources flexibly and orchestrating staggered
ramp-up and peak-growth phases across different businesses and application areas, we aim to
mitigate the impact from industry cycle to support more resilient sustainable operations.
 Business Front: Multi-track and Diversified Product Portfolio Strategy . Building
on our strengths in the Flash sector, we have continuously rolled out new product
lines in the MCU, niche DRAM, analog chips and sensor chips fields. In addition,
we have accelerated the development of new businesses through initiatives such as
strategic acquisition and internal incubation. Our diversified product portfolio is
designed to reinforce our system-level technological foundation. Leveraging
synergies between products and applications, we aim to achieve system-level
integration and coordination. Centered on system control, we integrate surrounding
components such as memory, sensing, power and signal chain to deliver
comprehensive solutions built around product portfolios, driving holistic and
sustainable growth.
 Application Front: Continuous Expansion into New Application Scenarios. We
have steadily broadened the application scenarios of our chips from the consumer
electronics sector to industrial and automotive sectors. Our downstream application
scenarios now encompass industrial applications (such as industrial automation,
energy storage and battery management), automotive, and consumer electronics
(such as wearable devices, smartwatches, TWS earphones and home appliances), as
well as networking and communications (including wireless routers, base stations
and optical modules), PC and servers and the IoT. This has enabled us to achieve
extensive coverage across a wide range of product applications.
Advancing Technological Innovation, Broadening Product Portfolio and Expanding into
Emerging Fields
Building on our four core business lines, including specialty memory chip, MCU, analog
chip and sensor chip, we aim to further our R&D efforts, expand our product portfolio and
enrich our solutions. We remain committed to a market share-focused growth strategy,
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consolidating our positions in consumer electronics, networking communications, computing
and smart home sectors, while further expanding and deepening our presence in industrial,
automotive and embodied AI markets to drive higher market share across all business units.
 Consumer electronics. We aim to continue to innovate and iterate our products and
further solidate our leading position in the consumer electronics market. Leveraging
the industry trend of AI integration in consumer electronics, we aim to meet
customer demands for AI smartphones, AI PC, AI earphones and other intelligent
devices that require greater code capacity, higher computing power and enhanced
data processing capabilities.
 Industrial applications. The domestic industrial market is currently dominated by
global giants. We aim to deepen our presence by investing resources and technology
to expand our product portfolio and enhance competitiveness, consistently
launching products that meet customer requirements and align with the future trend
of industrial intelligence.
 Automotive. In view of the high entry barriers and lengthy R&D cycles in the
automotive industry, we aim to maintain our strategic commitment to this sector. In
particular, we plan to accelerate product development and launches while refining
automotive chip technologies and products. Meanwhile, we plan to expedite the
adoption of our products by end customers.
 Embodied AI. Building on our extensive experience in the industrial field, we will
focus on “high performance + high reliability” products. In particular, we aim to
deliver integrated core control system solutions for humanoid robots.
Pursuing External Growth Through Strategic and Industry-related Partnerships,
Investments and Acquisitions.
Alongside organic growth, we aim to continue to selectively pursue strategic partnerships,
investments and acquisitions in both Chinese Mainland and overseas that can enhance our
overall competitiveness and fuel our sustainable growth. With an open mindset and strategic
vision, we plan to coordinate both organic and external growth strategies, comprehensively
enhance our overall capabilities, and lay a solid foundation for sustainable development.
 Strategic incubation and collaboration. We plan to focus on strategic incubation
and partnership opportunities in emerging technologies, new fields, innovative
products and outstanding teams. Through resource integration and collaborative
innovation, we aim to expand new business frontiers and enhance our innovation
capabilities and market influence within the industry.
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 Investment focus. We plan to focus on strategic areas such as AI, analog, high-speed
interfaces, automotive-grade chips and MCU, with targeted investments in projects
that demonstrate high growth potential and strong technical barriers. Through these
investments, we aim to gain a competitive edge in key sectors, strengthen our
technological reserves and enhance our industry competitiveness.
 Acquisition plan. We plan to seize the consolidation window in the semiconductor
industry and closely monitor high-quality targets. Through strategic acquisitions, we
aim to acquire technology, market presence and customer resources, driving
leapfrog growth in our scale and market share, and achieving an organic integration
of external expansion and internal development.
Accelerate Our Globalization to Build a World-Class Technology Brand.
Overseas markets offer us abundant growth opportunities. We aim to continue to advance
our global footprint, align with the needs of customers worldwide, enhance our localized
service capabilities and strengthen the integrated capabilities across supply chain, sales, R&D,
supply and service.
 Accelerate the Establishment of the Overseas Headquarters : We plan to expedite
our globalization by developing our overseas headquarters in Singapore, expanding
in the overseas sales, integrating global resources and enhancing our brand
recognition worldwide. Our headquarters in Chinese Mainland and Singapore have
different strategic focuses. The Chinese Mainland headquarters serves as the
headquarters for the Group. The Singapore headquarters serves as the overseas
headquarter, and is responsible for our international strategy, overseeing and
expanding overseas sales in regions such as Southeast Asia, Japan, the Americas and
Europe. This division of strategic focus allows us to address the unique needs and
opportunities of both domestic and global markets more effectively in complex and
changing market condition.
 Enhance Global Supply Chain Capabilities : Leveraging our fabless model, we plan
to continue to build and optimize our global supply chain and enhance supply chain
resilience, so as to cover the manufacturing of our mainstream products both in
Chinese Mainland and overseas.
 Improve Global Sales and Service Network : We plan to further expand our sales and
service networks in countries including the United States, South Korea, Japan, the
United Kingdom, Germany and Singapore. Through deep collaboration between
localized teams and channel partners, we aim to provide customers with rapid
response and customized services.
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Further Our Global Top Talent Strategy to Energize Organizational Vitality
We believe that talent is the key driver of innovation and the foundation for sustaining
competitive edges. We place great emphasis on attracting and nurturing outstanding talent,
actively implementing a strategy to rejuvenate our management ranks. This has enabled us to
assemble an elite team of dynamic, self-challenging and continuously improving talents in the
semiconductor field. We plan to further enrich our talent pool and invigorate our organization
through global recruitment, strategic talent development and enhanced incentive mechanisms.
In particular, we plan to further execute our successful talent strategies as follow:
 Global Recruitment. We plan to attract industry elites worldwide through open
recruitment, cultivate new talent through campus hiring and build a multi-tiered
talent pipeline utilizing flexible and diverse approaches.
 Talent Development. We plan to optimize strategic talent development programs and
establish differentiated career training systems tailored to specific roles to empower
key talents across all areas.
 Talent Incentives. We plan to enhance our performance evaluation, promotion and
incentive systems to fully unleash our team’s potential and creativities.
DEVELOPMENT OF OUR BUSINESS
Founded in 2005 with a focus on NOR Flash, we have since then established a leading
position in this market through continuous technological innovation and proven product
reliability. Building on our early success and guided by our market-oriented product strategy,
we have expanded our product offerings to encompass a broader range of specialty memory
chips including NAND Flash and niche DRAM, as well as MCU, analog chips and sensor
chips, thereby establishing the “Sense, Memory, Compute, Control and Connectivity”
synergistic ecological solutions. This gives us the vantage position to support the next
generation of intelligent applications, including various AI-driven technologies, and to seize
the significant growth potentials.
We have adopted a fabless business model since our inception to concentrate our
resources on chip design, platform development and market-oriented innovation, while
partnering with quality foundries and OSA T partners to ensure manufacturing excellence and
scalability and high-quality products.
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OUR PRODUCTS
Our diversified product portfolio includes specialty memory chips, MCU, analog chips
and sensor chips. Within each product category, we offer multiple series with different
specifications to meet the specific performance and functional requirements of different
application scenarios. While we primarily offer products for general-purpose use, we also
provide customized solutions to address specialized customer needs. Moreover, leveraging our
strong R&D capabilities and extensive IP portfolio, we also provide technical services and
license select IPs to third parties, further extending our influence across the industry. This
diversified product portfolio enables us to serve a wide spectrum of end markets, including
consumer electronics, automobiles, industrial applications (such as industrial automation,
energy storage and battery management), PC and servers, IoT, network communications and
other fields.
The table below sets forth our revenue by product during the years indicated.
Y ear Ended December 31, Six Months Ended June 30,
2022 2023 2024 2024 2025
(in RMB thousands, except for percentages)
(Unaudited)
Specialty memory chips /H1118 4,825,856 59.3% 4,077,311 70.8% 5,194,173 70.6% 2,604,520 72.2% 2,844,934 68.5%
NOR Flash /H1118/H1118/H1118/H1118/H1118/H1118/H11183,539,704 43.5% 2,995,404 52.0% 3,754,233 51.0% 1,833,014 50.8% 2,034,156 48.9%
DRAM (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118998,790 12.3% 809,973 14.1% 1,073,145 14.6% 559,532 15.5% 637,197 15.4%
NAND Flash /H1118/H1118/H1118/H1118/H1118/H1118287,362 3.5% 271,934 4.7% 366,795 5.0% 211,974 5.9% 173,581 4.2%
MCU /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,825,357 34.8% 1,312,209 22.8% 1,690,547 23.0% 802,115 22.2% 959,106 23.1%
Sensor chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118434,974 5.4% 352,449 6.1% 448,300 6.1% 192,173 5.3% 193,193 4.7%
Analog chips /H1118/H1118/H1118/H1118/H1118/H1118/H11183,851 0.0% 4,604 0.1% 15,468 0.2% 3,098 0.1% 152,276 3.7%
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,954 0.5% 14,250 0.2% 7,490 0.1% 7,131 0.2% 800 0.0%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,129,992 100.0% 5,760,823 100.0% 7,355,978 100.0% 3,609,037 100.0% 4,150,309 100.0%
Notes:
(1) Including the revenue from sales of DRAM designed and manufactured by CXMT Group in 2022 and the first
half of 2023.
(2) Including technical services and license fees for our IPs. Some customers may engage us to custom-develop
or design products for them, and purchase these custom-developed or designed products and the corresponding
technical support from us, and, on this basis, pay us a customization and technical service fees. And from time
to time, we may license our proprietary IPs to certain customers and charge royalty fees accordingly.
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The table below sets forth the sales volume and average selling prices of our products
during the years indicated.
Y ear Ended December 31, Six Months Ended June 30,
2022 2023 2024 2024 2025
Sales
volume
Average
Selling
Price (1)
Sales
volume
Average
Selling
Price (1)
Sales
volume
Average
Selling
Price (1)
Sales
volume
Average
Selling
Price (1)
Sales
volume
Average
Selling
Price (1)
(Unit’000) (RMB) (Unit’000) (RMB) (Unit’000) (RMB) (Unit’000) (RMB) (Unit’000) (RMB)
(Unaudited)
Specialty memory
chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,259,645 2.14 2,655,166 1.54 3,553,167 1.46 1,782,319 1.46 2,147,891 1.32
NOR Flash /H1118/H1118/H1118/H1118/H11182,180,800 1.62 2,532,962 1.18 3,335,830 1.13 1,660,268 1.10 2,034,441 1.00
DRAM (2) /H1118/H1118/H1118/H1118/H1118/H111844,987 22.20 66,527 12.18 133,453 8.04 69,429 8.06 73,210 8.70
NAND Flash /H1118/H1118/H1118/H111833,858 8.49 55,677 4.88 83,884 4.37 52,622 4.03 40,240 4.31
MCU /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118343,535 8.22 276,089 4.75 409,251 4.13 190,535 4.21 242,546 3.95
Sensor chips /H1118/H1118/H1118/H1118/H1118/H1118157,130 2.77 178,811 1.97 267,983 1.67 107,633 1.79 119,979 1.61
Analog chips /H1118/H1118/H1118/H1118/H11182,796 1.38 11,625 0.40 131,183 0.12 34,784 0.09 958,420 0.16
Notes:
(1) Average selling price is calculated through dividing revenue by the relevant sales volume during the same year,
which represented the average price at which our products were sold to our customers.
(2) Including the sales of DRAM designed and manufactured by CXMT Group in 2022 and the first half of 2023.
Specialty Memory Chips
Our specialty memory chips include Flash and niche DRAM.
Flash
Flash is a major type of non-volatile memory technology, which can retain data over a
long term. Our Flash memory chips primarily include NOR Flash and SLC NAND Flash. Our
Flash memory chips are designed for general-purpose use, which can be customized upon
special requirements from our customers.
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NOR Flash
NOR Flash allows random access to data, enabling fast and reliable code execution
directly from the memory, making it widely used in embedded systems that require frequent
and fast access to executable code. We focus on the mainstream SPI NOR Flash due to its
advantages in relatively lower cost, compact size, easier integration for space- and power-
sensitive applications, and growing adoption in applications such as embedded systems and
small-size wearables, as compared to parallel NOR Flash. NOR Flash is widely used in
products such as TWS earphones, robot vacuums, mobile phones, electric meters, 5G base
stations and millimeter-wave radar. For example, it is used in voice modules of robot vacuums
to store firmware and voice data, enabling rapid voice responses to user commands. To the best
of our knowledge, the end-uses of our NOR Flash chips are primarily in applications such as
automotive systems, wearables, industrial control units, and IoT devices.
In response to different market application needs, we provide diversified series of
industrial-grade and automotive-grade SPI NOR Flash, featuring high-performance, low-
power, high-reliability and small-package options including USON6 package standards with
size of only 1.2mm x 1.2mm, and have achieved wide product line coverage of SPI NOR Flash
across sectors including consumer electronics, industrial applications (such as industrial
automation, energy storage and battery management), communications and automotive
electronics. Our current SPI NOR Flash offerings can work under a wide range of power
supply, operating environments and end applications. In particular, our GD25/55 series SPI
NOR Flash is certified to meet the AEC-Q100 automotive standards and the ISO 26262:2018
ASIL D standard for functional safety and reliability. According to Frost & Sullivan, we were
the first company based in Chinese Mainland to introduce a high-performance SPI NOR Flash
product series with capacities reaching up to 2Gb and a comprehensive product portfolio of SPI
NOR Flash ranging from 512Kb to 2Gb. The table below sets forth the main features of our
SPI NOR Flash.
Voltage 3V 1.8V 1.65V – 3.6V 1.2V
1.8V VCC,
1.2V VIO
Capacity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118512Kb~2Gb 512Kb~2Gb 512Kb~256Mb 8Mb~256Mb 64Mb~512Mb
Speed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118104MHz~200MHz 50MHz~200MHz 50MHz~104MHz 120MHz 133MHz~200MHz
Operating temperature
range /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118-40oC~125 oC -40 oC~125 oC -40 oC~125 oC -40 oC~125 oC -40 oC~125 oC
NAND Flash
NAND Flash offers large storage capacity, fast erase/write speeds and long lifespan,
making it suitable for a wide range of large-capacity storage applications. Strategically, we
focus on SLC NAND Flash, featuring smaller capacities but higher reliability and endurance
as compared with MLC and TLC NAND Flash. Our SLC NAND Flash is an ideal solution for
embedded applications with large-capacity and highly reliable code storage requirements. Our
automotive-grade NAND Flash products, when paired with our automotive-grade NOR Flash,
are widely adopted in intelligent cockpits, autonomous driving systems, intelligent
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connectivity and powertrains of electric vehicles. In particular, our GD5F series of automotive-
grade SPI NAND Flash is certified to meet the AEC-Q100 automotive standard for functional
reliability. The table below sets forth the main features of our NAND Flash.
Interface type SPI Parallel
Voltage /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183V 1.8V 3V 1.8V
Capacity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181Gb~4Gb 1Gb~4Gb 1Gb~8Gb 1Gb~8Gb
Speed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Frequency:
104MHz~166MHz
Frequency:
80MHz~133MHz
tRC/tWC:
12ns~20ns
tRC/tWC:
20ns~25ns
Operating temperature range /H1118/H1118/H1118/H1118/H1118-40oC~105 oC -40 oC~105 oC -40 oC~105 oC -40 oC~105 oC
SLC NAND Flash is widely used in products such as network communication devices,
robot vacuums and wearable devices. For example, it is used to store frequently updated and
long-term data, such as the precise cleaning maps generated by LiDAR scans in robot vacuums.
To the best of our knowledge, the end-uses of our NAND FLash chips are primarily in
applications such as industrial-edge memory, automotive dash-cams and consumer electronics.
DRAM
DRAM, which includes mainstream DRAM and niche DRAM, is the major type of
volatile memory, which is a key component of system memory. We focus on niche DRAM,
which is designed for applications with specific requirements for performance, reliability or
operating environments, as opposed to mass-produced mainstream DRAM. Our niche DRAM
offering includes DDR3L, DDR4 and LPDDR4, with various capacity options. These products
feature low power consumption and compact size, and are primarily used in set-top boxes,
televisions, network communications, smart homes, wearable devices and infotainment
systems. The table below sets forth the main features of our niche DRAM.
DDR3L DDR4 LPDDR4
Capacity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181Gb/2Gb/4Gb/8Gb 4Gb/8Gb 16Gb/32Gb
Speed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181866/2133Mbps 2666/3200Mbps 3200/3733/4266Mbps
Operating temperature
range /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
-40°C~95°C -40°C~95°C -25°C~85°C
Major applications /H1118/H1118/H1118/H1118/H1118 network communication
 security surveillance
 set-top boxes
 smart homes
 industrial applications
(such as industrial
automation, energy
storage and battery
management)
 infotainment
 television
 security surveillance
 network communication
 smart homes
 industrial applications
(such as industrial
automation, energy
storage and battery
management)
 tablets
 infotainment
 television
 tablets
 smart homes
 smart wearables
 mobile modules
 IoT
 8K IPTV
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Niche DRAM is widely used in products such as smart glasses, robot vacuums and IPTV
set-top boxes. For example, in robot vacuums, it serves as volatile memory responsible for
real-time data processing and complex computations, such as temporarily storing and analyzing
data from multiple sensors like infrared and ultrasonic modules. To the best of our knowledge,
the end-uses of our niche DRAM chips are primarily in applications such as consumer
electronics, automotive, industrial, communications and medical devices.
MCU
MCU is a compact IC that combines a scaled-down version of a CPU with memory, timers
and other functional circuits on a single chip. As a control unit, it enables control solutions for,
among others, motors, lights and displays, sensors and user interfaces, which can be used in
various application scenarios including industrial applications (for example, industrial
automation, energy storage and battery management), medical equipment, consumer
electronics, handheld devices, humanoid robots, automotive electronics and computing
applications. Specifically, the MCU can be used in products such as smartwatches, robot
vacuums, instruments and meters, optical modules and T-BOX units. For example, in robot
vacuums, the MCU can serve as the moving control unit, coordinating the operation of various
components to move and avoid obstacles. We focus on 32-bit MCU based on licensed ARM
®
and open-source RISC-V architectures, offering a balance of high performance, low power
consumption and cost-effectiveness. In 2022, 2023 and 2024 and the six months ended June 30,
2024 and 2025, we paid license fees for ARM
® Cortex ®-M architectures of RMB39.0 million,
RMB28.7 million, RMB45.2 million, RMB14.6 million and RMB32.6 million, respectively.
We launched our general-purpose MCU, GD32, in 2013 based on ARM
® Cortex ®-M3, making
us the first in Chinese Mainland to offer MCU based on ARM ® Cortex ®- M architecture. In
2023, we launched the high-performance MCU based on ARM ® Cortex ®- M7 architecture,
which is able to be used in entry-level AI applications, making us the first company based in
Chinese Mainland to offer MCU based on such architecture. We also offer wireless MCU
suitable for market applications requiring efficient wireless communication. We continue to
build a comprehensive portfolio of MCU to offer customers with a wide selection. We have
launched 63 series with more than 700 products of MCU based on ARM
® Cortex ®-M
architectures, as well as RISC-V architecture. Our MCU are fully compatible with a wide range
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of high-, mid- and low-end embedded control applications and upgrade needs. With years of
market validation, our GD32 MCU have become a reliable and widely adopted option for
system design and project development. The table below sets forth our MCU portfolio layout
in different application scenarios.
ARM® Cortex ® – M MCU
RISC-V
MCU
Cortex ®
– M23
Cortex ®
–M 3
Cortex ®
–M 4
Cortex ®
– M33
Cortex ®
–M 7
High-performance (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H20844/H20844/H20844/H20844
Mainstream /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H20844/H20844/H20844 /H20844
Entry level /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H20844/H20844/H20844
Low power consumption (ii) /H1118 /H20844
Wireless /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H20844/H20844
Automotive-grade /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H20844/H20844/H20844
Specialized /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H20844/H20844 /H20844
Notes:
(i) Our high-performance MCU typically has maximum speed of over 200MHz.
(ii) Our low power consumption MCU generally refer to products that significantly reduce dynamic operating
power consumption (typically less than 150 µW/MHz) or static standby power consumption (typically less than
30 µW/MHz).
Analog Chips
Analog chips are primarily responsible for power conversion as well as signal acquisition
and conditioning. Our analog chips portfolio currently consists of five key product lines: power
management, motor drivers, battery management, signal chain and ASIC. These products are
widely deployed in a range of applications, including earbud charging cases, motor control
systems, lithium-ion battery charge/discharge management, wireless communication
equipment and power measurement and monitoring. Paired with our GD32 MCU, our analog
chips have been integrated in multiple solution platforms such as AI arc detection solutions and
robotic vacuum cleaners, thereby creating synergy in both established and emerging vertical
markets. Our analog products have gained strong recognition from leading manufacturers for
their high performance and reliability.
 Power management . Power management chips are designed to manage the power
requirements of electronic systems. We provide general-purpose power management
chips, mainly including DC-DC converters and linear regulators, which provide
reliable power supply solutions for a wide range of applications, including wireless
infrastructure, communications, industrial equipment, security systems, smart
wearables and the IoT.
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 Motor driver . Motor driver chips are designed to control and drive motors by
managing power delivery and directional control. We provide general-purpose motor
driver chips that are applicable to drive DC motors, stepper motors, solenoid motors,
electromagnetic valves and TECs (thermoelectric coolers), covering industrial
control, smart devices and consumer electronics application scenarios.
 Battery management . Battery management chips are designed to monitor, protect,
and optimize the performance of battery-powered systems. We mainly provide
general purpose battery charging chips, lithium-ion battery protection chips and
lithium-ion battery management chips.
 Signal chain . Signal chain chips are designed to process and condition signals in a
variety of electronic systems. We provide general-purpose ADC, operational
amplifiers, comparators, voltage reference ICs, current-sensing operational
amplifiers, and temperature and humidity detectors, which are applicable in various
fields such as power measurement, control, multi-phase motor control, battery
energy storage and battery formation.
 ASIC : Alongside the general-purpose analog chips, we also provide ASICs, mainly
including DDR5 memory ASICs and TWS earbuds charging ASICs.
Sensor Chips
Sensors are components that collect various signals from the physical world and output
them to backend systems for further processing. We currently develop and offer chip-level
sensors, which integrate functional elements and circuits into a single chip, mainly including
touch control sensors and fingerprint recognition sensors.
 Touch control sensors . We provide touch control sensors to enable common
human-machine interaction for smartphones, tablets and smart home devices. Our
touch control sensors offer wide coverage for screen sizes ranging from 1 inch to 20
inches.
 Fingerprint recognition sensors . We provide both capacitive and optical fingerprint
sensors, which enable us to provide mainstream fingerprint recognition solutions for
both traditional physical button fingerprint recognition and in-display fingerprint
recognition across numerous flagship, high-end and mid-range smartphones.
Leveraging our diversified product portfolio and comprehensive ecosystem under the
“Sense, Memory, Compute, Control and Connectivity” synergistic ecological solutions, we are
capable of providing comprehensive solutions in industries such as humanoid robots, EV and
smart wearables.
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Illustrative Solution — Humanoid Robots
Humanoid robots, as highly complex electromechanical systems, require ICs and sensors
that deliver breakthroughs in areas such as real-time control, energy efficiency, integration
level, communication capabilities and reliability. For instance, high-performance real-time
computing must support parallel control of multiple joint motors, sensor fusion, stringent
energy efficiency requirements, high integration and compact packaging, high-speed real-time
communication and industrial-grade reliability.
To meet these stringent requirements, we leverage our proven technical expertise, with
focus on high-performance and high reliability, to build the diversified product portfolio
including GD32 MCU, Flash, niche DRAM, analog chips and sensor chips to deliver a
comprehensive solutions in core control systems for humanoid robots.
MCU
Analog Chip
Hand
MCU
Elbow Joint
MCU
Analog Chip
Leg Joint
MCU
Brain
Cerebellum
SPI NOR Flash
SPI NOR Flash
SPI NAND Flash
Niche DRAM
MCU
Power
Management
Encoder
MCU
Illustrative Solution — Automobiles
Automobiles impose high demands on MCU. High real-time performance, high safety
standards and high reliability have consistently been the stringent criteria for automotive-grade
MCU. In today’s landscape where automotive electronics and electrical systems are advancing
towards a domain-centric architecture, the volume of data and code that MCU must process is
escalating exponentially. Consequently, addressing computational power limitations has
emerged as a pivotal challenge. Confronted with intricate challenges and a swiftly evolving
market, we have developed a strategic product portfolio, capitalizing on our profound
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experience in industrial MCU. This strategic move ensures extensive compatibility and
comprehensive coverage of the majority of automotive ECU application nodes. Moreover, we
have proactively tackled customer application pain points and conducted in-depth analyses of
the transformative trend of software-defined vehicles.
Flash also plays a critical role in automobiles by enabling reliable data storage and
real-time processing. Our automotive-grade Flash has been widely used in smart cockpits,
assisted driving, smart networking and key electrical systems for electric vehicles. As of the
Latest Practicable Date, the cumulative shipment volume of our automotive-grade Flash
exceeded 300 million units, making us one of the largest suppliers of automotive-grade Flash
in Chinese Mainland.
Electric Power
Steering
MCU
Heating, Ventilation,
and Air Conditioning
MCU
Flash
Continuous
Damping Control
Flash
Lighting
MCU
Flash
Radar
MCU
Flash
On-Board Charger/
DC-DC Converter
MCU
Flash
BMS
MCU
Flash
Gateway
MCU
Flash
Camera
Flash
Cluster
MCU
Flash
T-BOX
MCU
Flash
Seasonality
Demand for and sales of our products follow the same seasonality pattern as sales of the
end products that feature our products. As a result, we typically experience higher sales in the
second and third quarters of the year due to the stock preparation of customers in response to
the new product launch cycles and increased shopping activities during the holiday seasons.
See “Risk Factors — Risks Relating to Our Business and Industry — Our sales may be
influenced by seasonality.”
Product Pricing
As an IC design house, the prices of our products are closely tied to the inherent cyclical
nature of the semiconductor industry. See “Financial Information — Significant Factors
Affecting Our Results of Operations — Industry Cycle.” In addition to the cycle-driven supply
and demand dynamics, we determine the price of our products based on the costs of developing
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and manufacturing such products. We also consider various other factors when pricing our
products, such as our relationship with the customer, complexity of the product both in terms
of design and manufacturing, size of the order, our expected profit margin and competition.
RESEARCH AND DEVELOPMENT
R&D are critical to maintaining our market position and to the sustained growth of our
business by ensuring that we can continue to meet the evolving downstream needs of our
products. We have adopted the IPD framework that integrates our product business lines into
a unified R&D process, guided by the key principles of market-driven development,
quality-first, cross-department collaboration and continuous improvement. We are devoted to
in-house R&D of core IPs for our products, while also sourcing mature licensed IPs externally
to supplement our techniques and improve the overall performance of our products.
Our Research and Development Process
We have adopted a market-oriented R&D process based on IPD framework. Most of our
products are for general purpose, while we also provide customized products and services to
meet the specialized demands of customers. As such, we follow a typical R&D process detailed
below:
 Concept phase . Our product management department is responsible for conducting
market and customer research and compiling relevant information to identify the
market opportunities and define the products. An internal preliminary review
meeting will be held to evaluate the value of potential opportunities and products
and decide whether to proceed.
 Planning phase . If the project passes the approval review, our project management
department will coordinate with product engineering department, R&D design
department and other departments to formulate a detailed project plan, defining the
detailed product specifications, assigning personnel and other critical details.
 Development phase . The project team will execute the development tasks according
to the project objectives and pre-established plans.
 V erification phase. The product engineering department and product testing
department will conduct a comprehensive evaluation of the product’s electrical and
quality characteristics to confirm whether all specifications are met. The product
engineering department will conduct reliability testing on at least three batches of
products to ensure that the product reliability meets customer requirements and the
process stability supports mass production.
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 Product launch. Certain key customers may be selected to participate in pilot runs
for product testing, often offered discounted prices as encouragement. Debugging
and issue resolution are conducted based on feedback. After the product is
recognized and accepted by those customers, it will be fully launched for mass
production depending on the market condition, with the sales team actively
promoting and supporting it.
 Lifecycle management. Our product management department will be responsible for
the lifecycle management of launched products, to continue improving, supporting
and managing the products. Typically, we will address customer feedback and
perform quality improvement, manage product iterations and updates, optimize cost
through value engineering and plan product retirement.
Past Research and Development Achievements
Our R&D efforts have yielded significant results which enable us to establish our brand
recognition and competitive position. Some of our R&D results are protected by patents while
the rest are part of our proprietary trade secrets. As of June 30, 2025, we had been granted a
total of 1,016 patents in Chinese Mainland, including 794 invention patents, 220 utility models
and 2 designs, as well as 558 pending patent applications in Chinese Mainland. See “Appendix
IV — Statutory and General Information — Further Information about the Business —
Intellectual Property.” As of the same date, we were granted a total of 62 patents in the United
States, Germany, the United Kingdom, France, South Korea and Taiwan, China.
In particular, we have achieved many technological breakthroughs. In 2019, we launched
and mass-produced the world’s first 32-bit general-purpose MCU product based on a RISC-V
architecture. In 2020, we were the first in Chinese Mainland to roll out high-performance SPI
NOR Flash with a capacity of up to 2Gb, which became the preferred solution for code storage
in IoT devices. In 2022, we were the first company based in Chinese Mainland to launch 1.2V
low-voltage, ultra-low-power consumer-grade SPI NOR Flash, which meets the industry’s
evolving requirements for lower voltage and lower power consumption associated with
advanced controller processes. In 2023, we were the first company based in Chinese Mainland
to launch high-performance MCU based on the Arm
® Cortex ®-M7 architecture, which is able
to be used in entry-level AI applications. See “— Our Strengths — Our Diverse Range of Chip
Design and Strong R&D capabilities.”
Future R&D roadmap
According to Frost & Sullivan, AI is becoming a strategic driver of transformation across
the semiconductor industry. More specifically, edge AI is transforming traditional devices into
intelligent terminals capable of autonomous decision-making, creating rising demands for
more powerful, energy-efficient semiconductor components — particularly storage, MCU,
analog, and human-machine interface solutions like touch and fingerprint sensors. Against this
backdrop, we plan to continue focusing our R&D resources on products and solutions that are
compatible for AI applications, and to provide more high-performance and low energy
consumption products to satisfy the increasing needs of edge AI.
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R&D team and expenses
As of June 30, 2025, we had 1,556 experienced technical employees, accounting for
73.2% of our total number of employees as of the same date. Among the technical employees,
as of the same date, we had a R&D team consisting of 1,493 employees, accounting for 70.2%
of our total number of employees. They are distinguished by their high academic credentials,
professional expertise and extensive experience in project development. As of June 30, 2025,
approximately 57.5% of our employees held a master’s degree or above. In 2022, 2023 and
2024 and the six months ended June 30, 2024 and 2025, our R&D expenses amounted to
RMB935.6 million, RMB990.0 million, RMB1,122.4 million, RMB588.3 million and
RMB567.7 million, respectively, representing 11.5%, 17.2%, 15.3%, 16.3% and 13.7% of our
total revenue in the respective years/periods.
SALES AND MARKETING
We have established a global sales network comprising distributors and representatives in
over 40 countries or regions, supported by dedicated local service networks in the United
States, South Korea, Japan, the United Kingdom, Germany and Singapore. In addition, we have
an international dedicated team consisting of sales and marketing personnel and engineers to
provide localized services and support our sales and service network. This team is adept at
capturing and responding to real-time market intelligence, ensuring timely and effective
responses to customer needs.
We sell our products mainly through distributors, while we also make direct sales to
certain customers at their requests. We believe that consistently delivering high-quality
products on time that meet and exceed our users’ expectations is the most efficient sales and
marketing approach for us. As such, our sales and marketing activities are focused on
maintaining and expanding the scope of our strategic relationships with our direct and indirect
customers. Under our IPD framework, our sales teams are actively involved in our product
R&D process to ensure that we can deliver satisfactory products to our direct and indirect
customers.
Y ear Ended December 31, Six Months Ended June 30,
2022 2023 2024 2024 2025
(in RMB thousands, except for percentages)
(Unaudited)
Distributor sales /H1118/H1118/H1118/H1118/H11187,265,341 89.4% 5,214,706 90.5% 6,553,179 89.1% 3,167,689 87.8% 3,751,679 90.4%
Direct sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118864,651 10.6% 546,117 9.5% 802,799 10.9% 441,348 12.2% 398,630 9.6%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,129,992 100.0% 5,760,823 100.0% 7,355,978 100.0% 3,609,037 100.0% 4,150,309 100.0%
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Distributor Sales
Typically, our sales team will directly approach potential buyers to understand their
needs. When we secure a potential buyer, we will typically engage a local distributor to sell our
products to such a buyer in consideration of the following benefits, unless otherwise requested
by the buyer. We strategically collaborate with those distributors who possess extensive sales
channels to expand our market reach as those distributors can also source customers through
their sales networks and effectively serve the needs of customers in various regions, and
improve our cash flow as we typically require distributors to make prepayments for products.
Engaging distributors can reduce the burden on our internal sales team by outsourcing part of
the customer acquisition and relationship management. Moreover, by managing inventory and
handling deliveries, distributors streamline our logistics and reduce operational pressure,
enabling faster and more efficient order fulfillment. According to Frost & Sullivan, the use of
distribution model is in line with the industry norm. Our distributors can leverage their
channels to provide after-sales service to customers, while we offer technical supports to end
users as needed.
We have a seller-buyer relationship with our distributors whereby the ownership of the
products is transferred to our distributors upon their purchase of the products. Our sales to
distributors are recurring in nature. Revenue is recognised when control over the products is
transferred to the distributors upon delivery of these products to and acceptance of these
products by the distributors or the recipients designated by the distributors. Our distributors are
typically companies engaged in the sales and distribution of chips and electronic components.
Distributor Management
We strictly select our distributors based on a number of factors, including (i) general
background, such as their qualifications, scope of operations, business scale, relevant industry
experience, local distribution network, geographical points of sale coverage, customer service
capabilities, and sales and technical support capabilities, (ii) synergy of products, for which we
assess whether the other authorized products of the distributors conflict with our products or
whether there could be any synergy effect between our products and their other authorized
products, (iii) the capabilities of providing solutions comprising different products to the
customers, and (iv) systematic management, for which we assess whether the distributors have
well-established data infrastructure, including robust customer relationship management
systems and sales data analytics capabilities. We do not allow distributors to engage
sub-distributors as prescribed in distributor management policies issued by us.
To the best knowledge of our Directors, during the Track Record Period, all our
distributors were independent third parties, and none of our distributors were controlled by any
of our former or present employees during the Track Record Period.
We do not set sales target or minimum purchase amount for our distributors. We regularly
assess the performance of our distributors and leverage the assessment as a basis to determine
whether to renew our agreement with a certain distributor. More specifically, we consider
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various factors when renewing agreements with distributors, including their historical sales of
our products, payment records, compliance with the distribution agreement, compliance status,
after-sales capabilities and sales and marketing capabilities.
Although it is the distributors’ responsibility to manage their own inventories, we do not
set minimum purchase amounts for our distributors and encourage them to place orders
according to their actual and projected demands on a rolling basis. To better understand and
assess market demand, we typically require distributors to submit six-month sales forecasts and
place orders in line with those projections. In the event of significant fluctuations in sales or
material deviations from their forecasts, we may reach out to end customers to verify actual
demand and adjust distributor orders accordingly. We maintain close communication with our
distributors and reserve the right to request their inventory records as needed. Moreover, once
the products are delivered and accepted by our distributors, they cannot be returned or
exchanged other than in the case of quality issues. Based on the above, and to the best of our
knowledge, our Directors do not believe there was any material channel stuffing risk during the
Track Record Period. To the best knowledge of our Directors and based on the inventory
information provided by the distributors which was not verified or audited by us, our Directors
believe that there was no material amount of unsold inventories of our products held by
distributors for each of the Track Record Period.
Typically, our distributors are only allowed to non-exclusively sell our products in
distribution areas specified in the agreement. We generally reserve the right to terminate the
distribution agreement in the event that the distributors breach such requirements on
distribution areas upon 30-day written notice in advance. In terms of pricing, we typically
provide suggested retail prices of relevant products to distributors.
We enter into distribution agreements with our distributors. The terms of the agreements
vary depending on the result of our negotiation with each distributor, but these agreements
largely follow our standard template for distribution agreements. The table below sets forth the
key terms of our distribution agreements:
Duration : Generally three years, which will be renewed
automatically for additional one year if we are satisfied
with the assessment results of the distributor.
Payment and credit
terms
: We typically require our distributors to make prepayments
for the products. We may provide certain distributors with
credit terms ranging from seven days to 120 days
according to our customer credit management policy,
depending on their operating situations, financial
condition and expected transaction volume.
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Delivery of products : We are responsible for delivering products to the locations
specified in the orders to the distributors or designated
receivers.
Transfer of risks : Risks are transferred to the distributors once products have
been delivered by us to the agreed-upon location or
receiver.
Product
returns/exchanges
: We typically do not accept product returns or exchanges
other than in the case of quality issues. We may accept the
returns when our products are the subject of infringement
or misuse claims. According to Frost & Sullivan, such
return policy is in line with the industry norm.
Sales of products : Our distributors are only allowed to sell our products in
designated areas.
Pricing : The selling price of our products will be separately agreed
in the order placed by the distributors.
Termination : Either party to the agreement has the right to unilaterally
terminate the agreement without cause by providing a
90-day notice in advance. If either party fails to perform or
comply with any of its obligations under the agreement
within 30 days after receipt of written notice from the
other party, or enters into bankruptcy, liquidation,
receivership, or any other situation indicating insolvency
or inability to fulfill its obligations, the other party may
terminate the agreement immediately. Termination of the
agreement shall not affect either party’s obligation to pay
any amounts due to the other party under this Agreement,
and all such amounts shall remain payable when due.
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The table below sets forth the total number of our distributors and their movement during
the Track Record Period.
Y ear Ended December 31,
Six Months
Ended
June 30,
2022 2023 2024 2025
Number of distributors at the
beginning of the year/period /H1118/H1118/H1118 168 192 190 218
Number of new distributors /H1118/H1118/H1118/H1118/H1118/H111828 20 43 54
Number of terminated distributors /H1118 42 21 51 8
Number of distributors at the
end of the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118192 190 218 254
During the Track Record Period, the number of our distributors increased from 192 as of
December 31, 2022 to 254 as of June 30, 2025, primarily attributable to our consistent efforts
in developing and maintaining our sales network, as well as our long-term and stable
partnership with most of those distributors. In 2022, 2023 and 2024 and the six months ended
June 30, 2025, we terminated business relationships with 4, 22, 15 and 18 distributors,
respectively, primarily due to the development of our business and unsatisfied performance of
certain distributors. As of the Latest Practicable Date, we had 268 distributors, including 132
distributors in Chinese Mainland, 60 distributors in Hong Kong, and 12 distributors in Taiwan,
China.
Direct Sales
At the request of certain customers, we may sell the products directly to them.
We generally enter into framework agreements with our major customers, with actual
price and volume specified in individual purchase orders. The terms of these agreements vary
depending on the specific product or project and the result of our negotiation with each
customer, but these agreements generally contain the following terms:
Duration : Generally one year, unless otherwise agreed.
Pricing : The selling price of our products will be separately agreed
in the order placed by the customer.
Transfer of risks : Risks are transferred to the customers when the products
are accepted by them.
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Payment and credit
terms
: We typically require our customers to make prepayments
for the products. We may provide certain customers with
credit terms ranging from 60 days to 120 days according to
our customer credit management policy, depending on
their operating situations, financial condition and expected
transaction volume.
Minimum purchase
requirements
: Our framework agreements with our customers usually do
not contain minimum purchase requirements.
Delivery of products : We are generally responsible for delivering products to the
locations and at the times as specified in the orders placed
by our customers.
Product
returns/exchanges
: Our customers will inspect the products upon delivery and
are generally entitled to return or exchange products that
do not meet their requirements in terms of quality or
specifications.
Confidentiality : These framework agreements usually have strict
confidentiality provisions that restrict us from disclosing
confidential information of our major customers.
Termination : These framework agreements can be terminated with
mutual agreement of parties, or terminated unilaterally
under certain circumstances such as unrectified material
breach of the contract, force majeure or bankruptcy of a
party.
Our Customers
Our customers are distributors and direct sales customers which mainly include
manufacturers and sellers of electronic components. To our best knowledge, our products are
mainly integrated by consumer electronics manufacturers and automobile components
manufacturers. To our best knowledge, our products are mainly used by end customers in
applications such as the consumer electronics, automobiles, industrial applications (such as
industrial automation, energy storage and battery management), PC and servers, IoT and
network communications, and our end customers located in areas mainly including PRC, South
Korea and Japan.
Top Five Customers
Sales to our five largest customers of each year/period of the Track Record Period
amounted to RMB2,380.6 million, RMB1,766.5 million, RMB2,444.6 million and
RMB1,218.5 million in 2022, 2023 and 2024 and the six months ended June 30, 2025,
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respectively, accounting for 29.3%, 30.6%, 33.3% and 29.4% of our total sales in the respective
years/period. Sales to our largest customer of each year/period of the Track Record Period
amounted to RMB575.7 million, RMB410.5 million, RMB558.3 million and RMB321.9
million in 2022, 2023 and 2024 and the six months ended June 30, 2025, respectively,
accounting for 7.1%, 7.1%, 7.6% and 7.8% of our total sales in the respective years/period.
During the Track Record Period, to the best knowledge of our Directors, none of our Directors,
their associates or any of our current Shareholders (who, to the knowledge of our Directors,
own more than 5% of our share capital) had any interest in our five largest customers of any
year/period of the Track Record Period that are required to be disclosed under the Listing
Rules.
The following tables set forth certain information relating to our top five customers of
each year/period of the Track Record Period.
For the year ended December 31, 2022
Customer
Transaction
amount
Percentage
of sales
Type of
customers
Major products
purchased
from us Credit term
Y ear of
Commencement
of Business
Relationship
(in RMB
thousands) (%)
Customer A (1) /H1118/H1118 575,703 7.1% Distributors Specialty
memory chips
and MCU
Prepayment or
15 to 45 days
2012
Customer B
(2) /H1118/H1118 514,159 6.3% Distributors Specialty
memory chips
Prepayment 2020
Customer C (3) /H1118/H1118 454,837 5.6% Distributors Specialty
memory chips
and MCU
Prepayment 2021
Customer D
(4) /H1118/H1118 448,602 5.5% Distributors Specialty
memory chips,
MCU, analog
chips and
sensor chips
Prepayment 2014
Customer E
(5) /H1118/H1118 387,251 4.8% Distributors Specialty
memory chips,
MCU, analog
chips and
sensor chips
Prepayment 2020
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For the year ended December 31, 2023
Customer
Transaction
amount
Percentage
of sales
Types of
customers
Major products
purchased
from us Credit term
Y ear of
Commencement
of Business
Relationship
(in RMB
thousands) (%)
Customer B /H1118/H1118/H1118410,543 7.1% Distributors Specialty
memory chips
Prepayment 2020
Customer D /H1118/H1118/H1118383,368 6.7% Distributors Specialty
memory chips,
MCU, analog
chips and
sensor chips
Prepayment 2014
Customer A /H1118/H1118/H1118342,445 5.9% Distributors Specialty
memory chips
and MCU
Prepayment or
15 to 45 days
2012
Customer F
(6) /H1118/H1118 330,190 5.7% Distributors Specialty
memory chips,
MCU and
analog chips
Prepayment or
30 to 60 days
2019
Customer E /H1118/H1118/H1118299,924 5.2% Distributors Specialty
memory chips,
MCU, analog
chips and
sensor chips
Prepayment 2020
For the year ended December 31, 2024
Customer
Transaction
amount
Percentage
of sales
Types of
customers
Major products
purchased
from us Credit term
Y ear of
Commencement
of Business
Relationship
(in RMB
thousands) (%)
Customer A /H1118/H1118/H1118558,302 7.6% Distributors Specialty
memory chips
and MCU
Prepayment or
15 to 45 days
2012
Customer D /H1118/H1118/H1118542,122 7.4% Distributors Specialty
memory chips,
MCU, analog
chips and
sensor chips
Prepayment 2014
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Customer
Transaction
amount
Percentage
of sales
Types of
customers
Major products
purchased
from us Credit term
Y ear of
Commencement
of Business
Relationship
(in RMB
thousands) (%)
Customer C /H1118/H1118/H1118519,890 7.1% Distributors Specialty
memory chips
and MCU
Prepayment 2021
Customer F /H1118/H1118/H1118445,848 6.1% Distributors Specialty
memory chips,
MCU and
analog chips
Prepayment or
30 to 60 days
2019
Customer G
(7) /H1118/H1118 378,394 5.1% Distributors Specialty
memory chips,
MCU and
analog chips
Prepayment or
30 to 60 days
2021
For the six months ended June 30, 2025
Customer
Transaction
amount
Percentage
of sales
Types of
customers
Major products
purchased
from us Credit term
Y ear of
Commencement
of Business
Relationship
(in RMB
thousands) (%)
Customer C /H1118/H1118/H1118321,900 7.8% Distributors Specialty
memory chips
and MCU
Prepayment 2021
Customer D /H1118/H1118/H1118304,848 7.3% Distributors Specialty
memory chips,
MCU, analog
chips and
sensor chips
Prepayment 2014
Customer F /H1118/H1118/H1118226,533 5.5% Distributors Specialty
memory chips,
MCU and
analog chips
Prepayment or
30 to 60 days
2019
Customer A /H1118/H1118/H1118222,430 5.4% Distributors Specialty
memory chips
and MCU
Prepayment or
15 to 45 days
2012
Customer E /H1118/H1118/H1118142,767 3.4% Distributors Specialty
memory chips,
MCU, analog
chips and
sensor chips
Prepayment 2020
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Notes:
(1) Customer A is a leading Japanese company established in 1995, headquartered in Tokyo, Japan, and listed on
the Tokyo Stock Exchange. According to the publicly available information, as of June 30, 2025, the market
capitalization of its shares was approximately RMB315.6 million. It is a specialist trading company dealing
mainly in the sales of electronic components.
(2) Customer B is a leading electronics company established in 2017, located in Hong Kong, with a registered
capital of USD1.0 million as of the Latest Practicable Date. It specializes in the development, production and
distribution of high-quality electronic components, catering to a diverse range of industries including
telecommunications, consumer electronics and industrial automation.
(3) Customer C is a company established in 2000 and located in Hefei, China, with a registered capital of
RMB1,000 million as of the Latest Practicable Date. It engages in sales and distribution of electronic
components among others.
(4) Customer D is a leading electronics distributor established in 1999, located in Nanjing, China, and listed on
the Shenzhen Stock Exchange. According to the publicly available information, as of June 30, 2025, the market
capitalization of its shares was approximately RMB606.4 million. Its business covers multiple sectors
including new energy, automotive electronics, communication systems, industrial control AI and consumer
electronics.
(5) Customer E is a leading semiconductor company established in 2019 and located in Shenzhen, China, with a
registered capital of RMB10 million as of the Latest Practicable Date. It specializes in the technical
development of electronic products and sales of electronic components and electronic products.
(6) Customer F is a leading company primarily engages in the distribution and of various semiconductor electronic
components, and the provision of technical services. It was established in 1977, headquartered in Taiwan,
China, and listed on the Taiwan Stock Exchange. As of June 30, 2025, the market capitalization of its shares
was approximately RMB3.8 billion.
(7) Customer G is a leading Chinese distributor of electronic components, established in 2001 and located in Hong
Kong, with a registered capital of HK$400 million as of the Latest Practicable Date.
Third-party Payment Arrangement
Background
During the Track Record Period, some of our customers (individually or collectively, the
“Third-party Payment Customer(s) ”) settled payments with us through accounts belonging
to parties other than the contractual counterparties under the corresponding agreements (the
“Third-party Payment Arrangement ”).
In 2022, 2023 and 2024 and the six months ended June 30, 2025, a total number of 9, 10,
5 and 3 Third-party Payment Customers utilized the Third-Party Payment Arrangements to
settle payments with us, respectively. During the same periods, the revenue from designated
third parties to us were RMB160.1 million, RMB97.8 million, RMB39.5 million and RMB1.7
million, respectively, representing approximately 1.9%, 1.6%, 0.5% and 0.0% of the total
payments received from all customers in the corresponding years/period. During the Track
Record Period, no individual Third-party Payment Customer made material contribution to our
revenue.
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During the Track Record Period, to the best knowledge of our Directors, the third-party
payors designated by the Third-party Payment Customers primarily consisted of third-party
supply chain service providers.
Our Directors confirm that, during the Track Record Period and up to the Latest
Practicable Date, (i) we did not proactively initiate any Third-party Payment Arrangement or
participate in other forms in any of such arrangement; (ii) we did not provide any discount,
commission, rebate or other benefit to any of the Third-party Payment Customers to facilitate
or incentivize the Third-party Payment Arrangement; and (iii) the pricing and payment terms
of the agreements we entered into with the Third-party Payment Customers were in line with
the agreements with customers not involved in the Third-party Payment Arrangement.
Reasons for Utilizing the Third-party Payment Arrangement
As confirmed by Frost & Sullivan, it is not uncommon for distributors to settle their
corporate transactions through third-party payors in the semiconductor industry. The Third-
party Payment Customers’ use of the Third-party Payment Arrangement was primarily for the
following reasons:
 Some customers prefer to have arrangements with third-party supply chain service
providers for delivery and transshipment of products procured from us. For
convenience, some of those customers also settle their transactions with us through
accounts of their third-party supply chain service providers; and
 Typically, we require customers to make prepayments for products. However, those
third-party supply chain service providers may provide the customers with credit
terms for the payments settled with us through their accounts, depending on the
terms and conditions between them. As such, some customers prefer to settle their
transactions with us through accounts of their their-party supply chain service
providers for commercial consideration.
Termination and Implications of the Third-party Payment Arrangement
As of the Latest Practicable Date, we have ceased, or rectified though entering into
Tri-party Arrangement Agreement, all Third-party Payment Arrangements.
As advised by our PRC Legal Advisor, (i) the Company does not violate any mandatory
provisions of applicable laws or regulations in China due to the Third-party Payment
Arrangement; and (ii) considering that (a) as of the Latest Practicable Date, the confirmations
have been obtained from over 78% of the Third-party Payment Customers and their designated
payors participating in the Third-Party Payment Arrangement during the Track Record Period
confirming that they would not require the Company to return the funds and such funds do not
need to be refunded under such arrangement, and (b) during the Track Record Period and up
to the Latest Practicable Date, we had not been requested to refund funds, and to the best of
our knowledge, there was no actual or pending dispute or disagreement involving any
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Third-Party Payment Arrangement; as to the parties who have provided the confirmations
mentioned above, the risk that we are found obligated to return the funds according to
applicable PRC laws and regulations is remote.
As confirmed by the Company, (i) the Third-party Payment Arrangement was initiated by
the Third-party Payment Customers and was not an arrangement by the Company to circumvent
applicable tax laws and regulations or other applicable laws and regulations in China. All the
customer payments previously received under the Third-party Payment Arrangement were duly
booked according to the accounting procedures and policies, (ii) we had not been identified for
violating any applicable tax laws as a result of the Third-party Payment Arrangement during
the Track Record Period, (iii) we only accept payments from the third-party payors by
remittance from licensed banks, thereby ensuring the funding has satisfied the anti-money
laundering requirements implemented by the licensed banks, and (iv) we had not been subject
to any disputes or administrative penalties by the relevant government authorities with respect
to the Third-party Payment Arrangement during the Track Record Period and up to the Latest
Practicable Date.
Internal Control Measures
We are subject to various risks in relation to the Third-party Payment Arrangement. For
details, see “Risk Factors — Risks Relating to Our Business and Industry — We are subject
to various risks relating to third-party payment arrangement.” We have adopted internal control
measures to mitigate related risks and prevent future occurrences of the Third-party Payment
Arrangement, including but not limited to the following:
(i) we required our customers to settle their payments directly through their own
corporate bank accounts, and in particular, we issued a notice to the Third-party
Payment Customers informing them that payments made by third parties including
entities and individuals would not be accepted;
(ii) for customers who were unable to directly settle payments with us immediately at
the relevant times, we required that such customers (a) communicate relevant
information to us, including, among others, the identity of the third-party payors
involved; and (b) enter into a tri-party arrangement agreement (the “ Tri-party
Arrangement Agreement(s) ”) with us and the third-party payors based on our
house form. In the Tri-party Arrangement Agreement(s), it is specified that the
relevant customer delegates its payment obligation under the terms of the original
agreement with us to the respective third-party payor who has undertaken to pay
directly to us under the same terms, or that the third-party payor is jointly liable with
the Third-party Payment Customer for the relevant payments. By executing the
Tri-party Arrangement Agreement, the third-party payor becomes a contracting
party who is contractually obligated to settle the payment with us. As of the Latest
Practicable Date, there were 28 effective Tri-party Arrangement Agreements entered
into between the Company, the Third-party Payment Customers and the payors;
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(iii) After the third-party payor makes the payment to our account pursuant to the
requirements of Tri-party Arrangement Agreement and purchase order, the finance
department of us will match the payment with the corresponding customer account
based on the transaction information; and
(iv) Third-party payments that have not been approved or reported must be reasonably
explained by the sales manager and all subsequent transactions must be immediately
suspended.
Internal control measures have been established to preserve the integrity of our
Company’s financial and accounting information and prevent fraud and money laundering
activities.
(i) A compilation of financial management system and an information system account,
password and authority management system have been established to govern the
financial reporting process and the integrity of financial information. Such policies
are approved by management and circulated to relevant staff for execution; and
(ii) Code of conduct has been established which has set out the rules or policies that all
staff should adhere to.
We conduct regular review on the effectiveness of the aforesaid internal control measures
and promptly address any abnormalities and malfunctions. Our legal and financial department
is responsible for providing detailed review results and reporting the results to the management
periodically. Our Directors are of the view that the foregoing internal control measures are
effective and adequate in preventing Third-party Payment Arrangements and associated risks,
and our Directors will oversee the effectiveness of the aforementioned internal controls on
Third-party Payment Arrangements in the future.
INTRA-GROUP TRANSACTIONS
In our ordinary course of business, we conduct certain intra-group transactions among our
entities in different or same jurisdictions. The table below sets forth the amount of our key
intra-group transactions and arrangements for the years/period indicated.
Y ear ended December 31,
Six Months Ended
June 30,
Transaction type 2022 2023 2024 2024 2025
(RMB’000)
(unaudited)
Sales of products /H1118/H1118/H1118/H1118/H1118/H1118/H11186,075,444 3,489,345 5,829,693 2,887,025 2,816,472
R&D services /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118405,041 352,724 480,891 235,112 236,852
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During the Track Record Period, certain of our domestic entities sold the finished chips
to our overseas entities in Hong Kong and Singapore, and certain of our domestic entities
provided R&D services to other domestic entities.
We have engaged an independent transfer pricing consultant to conduct a review of our
key intra-group transactions in 2022, 2023 and 2024, with a focus on material and recurring
transactions. The consultant reviewed information provided by us, including financial figures
and activities performed by relevant group entities, and performed benchmark studies. The
consultant assessed the reasonableness of the relevant transfer pricing transactions and
arrangements by applying appropriate transfer pricing methods primarily using the
transactional net margin method. The objective was to evaluate whether the relevant pricing of
intra-group transactions was in line with the arm’s length principle and whether there would
give rise to material tax exposure.
Based on the previous assessment conducted by our independent transfer pricing
consultant, our Directors believe that, during the Track Record Period, our relevant intra-group
transactions were in line with the arm’s length principle, and our transfer pricing risks resulting
from our intra-group transactions were relatively low.
The independent transfer pricing consultant reviewed the following key transfer pricing
transactions and arrangements, and the results of the analyses are summarized as below.
Sales of Products
Certain domestic entities, including the Company, GigaDevice Hefei, GigaDevice
Shanghai and Silead, sold finished chips to our overseas entities in Hong Kong and Singapore.
The independent transfer pricing consultant has reviewed these transactions and based on
such assessment, our Directors believe that the gross profit margins for such sales were within
the interquartile range based on comparable benchmarks. Accordingly, the pricing of these
transactions is considered consistent with the arm’s length principle.
R&D Services
Certain domestic entities, including GigaDevice Xi’an and Suzhou Freethink, provided
R&D services to certain of our domestic entities.
The independent transfer pricing consultant has reviewed these transactions and based on
such assessment, our Directors believe that (i) the gross profit margins for transactions of
GigaDevice Xi’an were within the interquartile range based on comparable benchmarks, and
(ii) the gross profit margins for transactions of Suzhou Freethink were higher than the
interquartile range based on comparable benchmarks, while the consultant considered that
Suzhou Freethink had received no less than arm’s length compensation under their R&D
service arrangements with related parties.
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PRODUCTION, PROCUREMENT, INVENTORY AND LOGISTICS
Our Fabless Model
We do not directly manufacture our products. Instead, we have adopted the fabless model,
whereby we cooperate with quality production partners for all phases of the manufacturing
process. This allows us to concentrate our resources on chip design, platform development and
market-oriented innovation, while partnering with leading foundries and OSA T partners to
ensure manufacturing excellence and scalability and high-quality products. In addition, the
fabless model allows us to avoid many of the significant costs and risks associated with owning
and operating various fabrication and packaging and testing facilities. As of the Latest
Practicable Date, we worked closely with 11 quality foundry partners for IC fabrication, and
26 OSA T partners for IC packaging and testing. After consultation with Frost & Sullivan, we
are of the view that it is an industry norm for a fabless IC design house to rely on a limited
number of foundry and OSA T partners to ensure consistency in product quality.
Beyond IC design, we dedicate resources to jointly develop optimized production
processes with foundries tailored for our products and collaboratively establish Design for
Manufacturability (DFM) and Design for Reliability (DFR) rules suitable for our products,
resulting in strong integration capabilities between process design and manufacturing. Through
sharing industry insights, technical exchanges and collaborative custom development, we
contribute to upstream industry advancements in areas such as chip architecture upgrades and
process technology evolution and innovation, securing preferential and comprehensive support
from the supply chain.
Our foundry partners are responsible for procurement of raw materials used in the
production of our ICs. Once our foundry partners complete the fabrication of the wafers, the
foundry partners or we are responsible for shipping them to our OSA T partners for cutting,
packaging and testing, depending on the agreements. See “— Logistics” for further details.
Our Directors do not believe that there would be material adverse change on our business
relationships with our foundry partners and OSA T partners in the near future, in consideration
of (i) the stable business relationship with our major foundry partners and OSA T partners, (ii)
that during the Track Record Period and up to the Latest Practicable Date, there was no
material suspension or disruption of business relationship with our major foundry partners and
OSA T partners, (iii) that during the Track Record Period and up to the Latest Practicable Date,
there was no material disputes between us and our foundry partners and OSA T partners, and
(iv) that we generally enter into framework agreements with our foundry partners and OSA T
partners. We have established stable business relationships with well-known domestic and
overseas foundry and OSA T partners during the Track Record Period. Based on our extensive
industry network, strong market position, and the availability of suitable alternative suppliers
in the market according to the Frost & Sullivan, our Directors believe that, should the need
arises, we could find suitable alternative suppliers under commercially reasonable and
mutually acceptable terms. However, there is no assurance that we can always keep good
business relationships with our foundry partners or OSA T partners. If our business
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relationships with our foundry and OSA T partners deteriorate, we may not be able to obtain the
required capacity and would have to seek alternative foundries, which may not be available on
commercially reasonable terms, or at all. See “Risk Factors — We rely on third parties for IC
fabrication, testing and packaging.”
Arrangements with Our Production Partners
Selection of Production Partners
We carefully select our production partners, and we evaluate them based on a range of
factors, including overall track record, technological expertise, product quality and quality
control effectiveness, price, reliability, ability to meet our delivery timeline, locations, logistics
and production capacity. We cooperate with quality foundry partners and OSA T partners, which
we believe safeguards the quality of the IC.
IC Fabrication
We provide our foundry partners with production plans covering the next one to three
years and update such plans on a monthly basis, in order for them to allocate their production
resources. The actual terms and conditions of the purchases, including the pricing, volume and
specification of the chips, are specified in individual purchase orders.
Packaging and Testing
We typically settle with our OSA T partners on a monthly basis.
Our Suppliers
Our suppliers are mainly our foundry partners for IC fabrication and OSA T partners for
IC testing and packaging.
We generally enter into framework agreements with our major foundries and OSA T
partners, with the actual price and volume specified in individual purchase orders. The terms
of these agreements vary depending on the specific product or project and the result of our
negotiation with each customer, but these agreements generally contain the following terms:
Duration : Generally three to five years for foundries, and three years
for packaging and testing agreements, unless otherwise
agreed.
Principal rights and
obligations of
parties involved
: We provide product parameters, technical specifications,
production process requirements, and other product
requirements to foundry partners. Our foundry partners
fabricate wafer products according to our requirements.
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We provide wafer products and technical specifications to
packaging and testing service providers who provide
packaging and testing services in accordance with our
requirements.
Payment and credit
terms
: We make payments according to the terms specified in the
purchase orders or the agreements.
We are typically granted a credit term of one month by our
foundry partners, and a credit term of one to two months
by our OSA T partners.
Quality assurance : The foundries and OSA T partners are required to deliver
products that meet our specified quality requirements and
product specifications.
Product return : We have the right to reject, replace or return products due
to non-conformity with our product quality requirements
or specifications due to suppliers’ faults.
Termination : Either party is entitled to terminate the agreement in
accordance with the terms specified in the agreement,
including material breach of contract.
Top Five Suppliers
Purchases from our five largest suppliers of each year/period of the Track Record Period
amounted to RMB4,090.6 million, RMB3,081.9 million, RMB3,696.9 million and
RMB2,007.8 million in 2022, 2023 and 2024 and the six months ended June 30, 2025,
respectively, accounting for 73.4%, 71.0%, 70.2% and 68.9% of our total purchases in the
respective years/period. Purchases from our largest supplier of each year/period of the Track
Record Period amounted to RMB1,369.8 million, RMB1,320.9 million, RMB1,356.2 million
and RMB765.8 million in 2022, 2023 and 2024 and the six months ended June 30, 2025,
respectively, accounting for 24.6%, 30.4%, 25.8% and 26.3% of our total purchases in the
respective years/period. Except for Suppliers C and F as disclosed below, during the Track
Record Period, to the best knowledge of our Directors, none of our Directors, their associates
or any of our current Shareholders (who, to the knowledge of our Directors, own more than 5%
of our share capital) had any interest in our five largest suppliers of any year/period of the
Track Record Period that is required to be disclosed under the Listing Rules.
The tables below set forth certain information about our top five suppliers of each
year/period of the Track Record Period.
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For the year ended December 31, 2022
Supplier Operating Location
Transaction
amount
Percentage of
purchases
Major products/
services
provided to us Credit term
Y ear of
Commencement
of Business
Relationship
(in RMB
thousands) (%)
Supplier A (1) /H1118/H1118/H1118/H1118Chinese Mainland 1,369,763 24.6% Wafers 30 to 60 days 2005
Supplier B (2) /H1118/H1118/H1118/H1118Chinese Mainland 1,308,606 23.5% Wafers 30 to 60 days 2019
Supplier C (3) /H1118/H1118/H1118/H1118Chinese Mainland 887,432 15.9% Wafers 30 to 60 days 2019
Supplier D (4) /H1118/H1118/H1118/H1118Chinese Mainland 323,613 5.8% Packaging and
testing
60 days 2010
Supplier E (5) /H1118/H1118/H1118/H1118Taiwan, China 201,175 3.6% Wafers 30 to 60 days 2015
For the year ended December 31, 2023
Supplier Operating Location
Transaction
amount
Percentage of
purchases
Major products/
services
provided to us Credit term
Y ear of
Commencement
of Business
Relationship
(in RMB
thousands) (%)
Supplier A /H1118/H1118/H1118/H1118/H1118Chinese Mainland 1,320,853 30.4% Wafers 30 to 60 days 2005
Supplier C /H1118/H1118/H1118/H1118/H1118Chinese Mainland 767,402 17.7% Wafers 30 to 60 days 2019
Supplier B /H1118/H1118/H1118/H1118/H1118Chinese Mainland 573,517 13.2% Wafers 30 to 60 days 2019
Supplier D /H1118/H1118/H1118/H1118/H1118Chinese Mainland 252,010 5.8% Packaging and
testing
60 days 2010
Supplier E /H1118/H1118/H1118/H1118/H1118Taiwan, China 168,136 3.9% Wafers 30 to 60 days 2015
For the year ended December 31, 2024
Supplier Operating Location
Transaction
amount
Percentage of
purchases
Major products/
services
provided to us Credit term
Y ear of
Commencement
of Business
Relationship
(in RMB
thousands) (%)
Supplier A /H1118/H1118/H1118/H1118/H1118Chinese Mainland 1,356,249 25.8% Wafers 30 to 60 days 2005
Supplier C /H1118/H1118/H1118/H1118/H1118Chinese Mainland 1,018,035 19.3% Wafers 30 to 60 days 2019
Supplier B /H1118/H1118/H1118/H1118/H1118Chinese Mainland 708,482 13.5% Wafers 30 to 60 days 2019
Supplier D /H1118/H1118/H1118/H1118/H1118Chinese Mainland 455,201 8.6% Packaging and
testing
60 days 2010
Supplier E /H1118/H1118/H1118/H1118/H1118Taiwan, China 158,897 3.0% Wafers 30 to 60 days 2015
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For the six months ended June 30, 2025
Supplier Operating Location
Transaction
amount
Percentage of
purchases
Major products/
services
provided to us Credit term
Y ear of
Commencement
of Business
Relationship
(in RMB
thousands) (%)
Supplier A /H1118/H1118/H1118/H1118/H1118Chinese Mainland 765,779 26.3% Wafers 30 to 60 days 2005
Supplier B /H1118/H1118/H1118/H1118/H1118Chinese Mainland 500,922 17.2% Wafers 30 to 60 days 2019
Supplier C /H1118/H1118/H1118/H1118/H1118Chinese Mainland 433,482 14.9% Wafers 30 to 60 days 2019
Supplier D /H1118/H1118/H1118/H1118/H1118Chinese Mainland 213,239 7.3% Packaging and
testing
60 days 2010
Supplier F (6) /H1118/H1118/H1118/H1118Chinese Mainland 94,388 3.2% Wafers 30 to 60 days 2019
Notes:
(1) Supplier A is an IC manufacturing company established in 2000, headquartered in Shanghai, China, and listed
on the Hong Kong Stock Exchange and the Shanghai Stock Exchange. According to the publicly available
information, as of June 30, 2025, the market capitalization of its shares was approximately RMB411.4 billion.
It specializes in the manufacturing and sales of wafers, providing advanced process technologies and solutions
for a wide range of applications, including communications, consumer electronics, automotive and industrial
sectors.
(2) Supplier B is a foundry company, established in 2005 and headquartered in Shanghai, China, listed on the
Hong Kong Stock Exchange and the Shanghai Stock Exchange. According to the publicly available
information, as of June 30, 2025, the market capitalization of its shares was approximately RMB67.6 billion.
(3) Supplier C is a leading IC manufacturing company established in 2016 and headquartered in Hefei, China, with
a registered capital of RMB60.2 billion as of the Latest Practicable Date. It is primarily engaged in the
research, development, production and sales of DRAM products.
As of the Latest Practicable Date, Supplier C was held as to 21.67% by Hefei Qinghui Jidian Enterprise
Management Partnership (Limited Partnership) (૶ሾණཥΆุ၍ଣΥྫΆุ(Υྫ), “ Qinghui
Jidian ”). Qinghui Jidian was held as to 0.01% by Hefei Qinghui Changxin Enterprise Management Partnership
(Limited Partnership) (㒥Άุ၍ଣΥྫΆุ(Υྫ), “ Qinghui Changxin ”) as its general
partner. Qinghui Changxin was held as to 51% by Mr. Zhu Yiming and 49% by Beijing Qinghui Xindian
Enterprise Management Co., Ltd. (ʮ̡,“ Qinghui Xindian ”), which was
controlled by Mr. Zhu Yiming. Mr. Zhu Yiming was also a limited partner interested in more than one third
of the partnership interest in Hefei Jixin No. 41 Enterprise Management Partnership (Limited Partnership) ( Υ
ఠ໮Άุ၍ଣΥྫΆุ(Υྫ), “ Jixin No. 41 ”), which was in turn interested in more than one
third of the partnership interest in Hefei Jixin No. 40 Enterprise Management Partnership (Limited Partnership)
(໮Άุ၍ଣΥྫΆุ(Υྫ), “ Jixin No. 40 ”) as a limited partner. Each of Jixin No. 41 and
Jixin No. 40 is an employee shareholding platform of Supplier C. Jixin No. 40 was interested in more than one
third of the partnership interest in Hefei Jixin Enterprise Management Partnership (Limited Partnership) ( Υ
ණ㒥Άุ၍ଣΥྫΆุ(Υྫ), “ Hefei Jixin ”) as a limited partner. As of the Latest Practicable Date,
Hefei Jixin held approximately 8.37% of the total issued share capital of Supplier C.
(4) Supplier D is a leading IC packaging and testing company established in 2003 and located in Gansu, China.
It is listed on the Shenzhen Stock Exchange and specializes in providing advanced packaging and testing
services for a wide range of semiconductor products, with customers across multiple industries globally.
According to the publicly available information, as of June 30, 2025, the market capitalization of its shares
was RMB30.3 billion.
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(5) Supplier E is a global semiconductor foundry company, established in 1980 and headquartered in Taiwan,
China, and listed on the Taiwan Stock Exchange and the New Y ork Stock Exchange. According to the publicly
available information, as of June 30, 2025, the market capitalization of its shares was approximately
RMB271.8 billion. It provides high quality IC fabrication services, focusing on logic and various specialty
technologies to serve all major sectors of the electronics industry.
(6) Supplier F is a company established in 2017 and located in Guangzhou, China, with a registered capital of
RMB2,365.6 million as of the Latest Practicable Date. It engages in integrated circuit design and
manufacturing.
As of the Latest Practicable Date, Supplier F was held as to 0.91% by Suzhou Jingpu V enture Capital
Partnership (Limited Partnership) ( ᘽψ౺ዾ௴ุҳ༟ΥྫΆุ(Υྫ), “ Suzhou Jingpu ”) . Mr. Hu Hong,
an Executive Director and the deputy general manager of the Company, held 7.48% interests in Suzhou Jingpu
as limited partners.
Overlapping of Suppliers and Customers
Supplier A among our five largest suppliers of each year/period of the Track Record
Period was also our customer in the corresponding years/period, and our sales to them were
RMB134,200, RMB9,840, RMB12,547 and RMB2,762 in 2022, 2023 and 2024 and the six
months ended June 30, 2025, respectively, which amounted to less than 0.1% of our total
revenue in corresponding years/period. In 2022, the Supplier C was also our customer in the
corresponding year, and our sales to them were RMB2.3 million, which amounted to less than
0.1% of our total revenue in corresponding year. We mainly procured wafers from them, and
provided them with IP licensing services. Our procurement from Supplier A and Supplier C, as
well as our sales to them, are not interdependent and are negotiated through separate processes.
These transactions are conducted in the ordinary course of business and on commercial terms
negotiated at arm’s length. Save as disclosed above, to the best knowledge of the Company,
there was no other overlapping of suppliers and customers among our five largest customers
and suppliers of each year/period of the Track Record Period.
See “— Sales and Marketing — Our Customers,” and “— Production, Procurement,
Inventory and Logistics — Our Suppliers.”
Inventory Management
We primarily offer off-the-shelf products, and maintain a readily available inventory. We
place great importance on our inventory health, with dedicated personnel responsible for
regular reports of inventory status to our management. We take inventory level into
consideration when formulating procurement plans.
Our inventories mainly include raw materials, work in progress and finished products.
Our raw materials mainly consist of the wafers supplied by our foundry partners, and our
work-in-progress inventory mainly comprises the unfinished chips undergoing packaging and
testing processing at our OSA T partners. We have various policies in place to ensure effective
inventory management, such as adopting the first-in, first-out method, maintaining a safe
inventory level for any unexpected increase in demand or delay in supply and tracking and
monitoring the flow of goods and inventory levels through our warehouse management system
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(“WMS”). Typically, we determine the inventory level for each type of our products based on
the historical sales of such products and projected sales in consideration of the dynamic market
demands and industry trends. As of December 31, 2022, 2023 and 2024 and June 30, 2025, the
balance of our inventories was RMB2,153.9 million, RMB1,990.9 million, RMB2,346.4
million and RMB2,400.6 million, respectively. In 2022, 2023 and 2024 and the six months
ended June 30, 2025, our inventory turnover days were 148 days, 188 days, 167 days and 163
days, respectively. See “Financial Information — Selected Items of Consolidated Statements
of Financial Position.”
Logistics
Depending on our agreements with the foundry partners, the foundry partners or we are
responsible for shipping the wafers from the foundries to the testing and packaging facilities.
We are responsible for shipping the packaged and tested chips to the locations or receivers as
designated by our distributors or direct sales customers.
We engage qualified third-party logistics service providers for the deliveries. When
selecting a logistics service provider, we typically consider their specialty and professional
qualification, price, reputation, transportation efficiency, transportation capability and their
track records. We also require our logistics providers to possess transportation permits and
other relevant qualifications to conduct their business, as well as other qualifications as
required by law. We normally enter into long-term agreements with our logistics service
providers and evaluate their performance on an annual basis.
During the Track Record Period and up to the Latest Practicable Date, we had not
experienced any significant delay in delivery that materially affected our business operations.
Quality Control
We emphasize quality control in all aspects of our operations, covering process,
customers and business. From product development and sourcing of supplies to sales and
deliveries, we strictly control the quality of our products to ensure our products meet our
stringent internal standards as well as international and industry standards. We have been
certified under ISO 9001, ISO 14001 and ISO 45001.
We devote significant resources to the quality control of our products. We have
established a dedicated quality control department consisting of more than 60 personnel as of
June 30, 2025, which is mainly responsible for (i) receiving and fulfilling customer
requirements for product quality, (ii) quality management for production partners, including
foundry partners and OSA T partners, and (iii) final quality assurance of products and ensuring
accountability for product quality. We also established a product test center in Hefei, China,
with a laboratory occupying over 3,000 m
2 and a dedicated product testing team. As of June
30, our product testing department consisted of more than 160 personnel, which is responsible
for product testing to ensure quality.
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Moreover, insisting on the quality-first principle, we have incorporated the Advanced
Product Quality Planning (“ APQP ”) process into our IPD framework, upfronting quality
planning and control throughout each stage of development to ensure the quality of our
products. We have specially established a dedicated product quality assurance position in the
R&D projects, the person occupying which is responsible for managing product quality and
reliability throughout the development process, effectively connecting the quality control
department and R&D department.
We inspect the wafers before their delivery for packaging and testing. Our packaging and
testing partners also conduct inspections on the wafers for us. Upon delivery of the packaged
and tested chips, we also conduct system-level inspections.
During the Track Record Period and up to the Latest Practicable Date, we had never
experienced any material penalties in relation to production quality or any material product
quality disputes.
Warranty and After-sales Services
We typically provide a one-year warranty for our products, which is in line with
prevailing industry practice according to Frost & Sullivan. Our warranty term is typically
limited to defects or failures of products that do not meet the product specifications published
by us or other specifications as agreed upon in writing with our customers.
We have devised a standard operating procedure for customer service. For direct sales, we
will provide after-sales services directly to our customers. For distributor sales, if the indirect
customer encounters an after-sales issue, whether they contact us directly or report it through
the distributor, we require such issue to be recorded in our system in accordance with our
established procedures. We will coordinate with the distributor or communicate directly with
the indirect customer to ensure that the issue is properly resolved. We will also continuously
track the progress of such issue to maintain high standards of customer service quality.
We accept returns of our system products for defects. During the Track Record Period, the
value of returned products we accepted was less than 1.0% of the total revenue of each period,
which was lower than the industry average level according to the Frost & Sullivan. We believe
our return policy is consistent with the relevant PRC laws and regulations governing product
quality and consumer rights and interests, as applicable. We did not receive any requests for
returns during the Track Record Period that individually or in aggregate had a material adverse
effect on our business and financial condition. In addition, during the Track Record Period and
up to the Latest Practicable Date, we had not experienced any product recall that materially and
adversely impacted our reputation, business operations or financial condition.
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RELATIONSHIP WITH CXMT
Background of CXMT
CXMT (together with its subsidiaries, “ CXMT Group ”) is a leading IC manufacturing
company with an IDM business model established in June 2016 and headquartered in Hefei,
Anhui Province, the PRC, primarily engaged in the research, development, production and
sales of DRAM.
In October 2017, the Company entered into a cooperation agreement with Hefei Industrial
Investment Holdings (Group) Co., Ltd. (ٰ(ණྠ)ʮ̡), a company
wholly owned by the State-owned Assets Supervision and Administration Committee of the
People’s Government of Hefei (ึ), in relation to the
investment and cooperation in a DRAM research and development project. To facilitate the
progress of the project, at the request of the relevant cooperating partners of the project, Mr.
Zhu Yiming, as the Company’s representative, was appointed as the chairman of the board of
directors and the chief executive officer of CXMT Memory and the chief executive officer of
CXMT, with such appointments approved by the Board and the Shareholders. Each of CXMT
and CXMT Memory was an implementation entity for the abovementioned project.
In April 2024, the Company subscribed for 574,714,200 shares of CXMT in its pre-IPO
financing, immediately upon completion of which the post-money valuation of CXMT was
approximately RMB150.8 billion. As of the Latest Practicable Date, CXMT was held as to,
among others, 21.67% by Qinghui Jidian and 1.80% by the Company. Qinghui Jidian was held
as to approximately 51.09% by Hefei Xinrui Investment Co., Ltd. (ப΂ʮ
̡,“ Hefei Xinrui ”) as a limited partner, 48.90% by Hefei Changxin Integrated Circuit Co.,
Ltd. (ப΂ʮ̡,“ Hefei Changxin ”) as a limited partner and 0.01% by
Qinghui Changxin as its general partner. Hefei Xinrui was ultimately wholly owned by the
State-owned Assets Supervision and Administration Commission of Hefei Economic and
Technological Development Zone (ึ). Hefei
Changxin was ultimately wholly owned by the State-owned Assets Supervision and
Administration Commission of Hefei Municipal People’s Government (਷Ϟ༟
ึ). Qinghui Changxin was held as to 51% by Mr. Zhu Yiming and 49% by
Qinghui Xindian, which was controlled by Mr. Zhu Yiming. Mr. Zhu Yiming was also a limited
partner interested in more than one third of the partnership interest in Jixin No. 41, which was
in turn interested in more than one third of the partnership interest in Jixin No. 40 as a limited
partner. Each of Jixin No. 41 and Jixin No. 40 is an employee shareholding platform of CXMT.
Jixin No. 40 was interested in more than one third of the partnership interest in Hefei Jixin as
a limited partner. As of the Latest Practicable Date, Hefei Jixin held approximately 8.37% of
the total issued share capital of CXMT. Mr. Zhu Yiming is currently the chairman of the board
of directors (the “ CXMT Board ”) and chairman of the executive committee of CXMT, with
such positions approved by the Board and the Shareholders. To the best knowledge of the
Company, (i) there is no other cross-shareholding, or common major shareholders between the
Company and CXMT; (ii) there are no other relationships between the Company, CXMT, their
directors and their respective associates; and (iii) there are no other assets, personnel or
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resources shared between the Company and CXMT. As (i) CXMT is not a 30%-controlled
company (as defined under Chapter 14A of the Listing Rules) held, directly or indirectly, by
Mr. Zhu Yiming; and (ii) there are no other relationship between the Company, CXMT, their
directors and their respective associates, CXMT is not a connected person of the Company.
Businesses of the Group and CXMT Group
During the Track Record Period and up to the Latest Practicable Date, both the Group and
CXMT Group have been involved in the DRAM business and CXMT Group has been one of
the major suppliers of the Group. For details of the business relationship between the Group
and CXMT Group, see “— Business Relationship between the Group and CXMT Group”
below. The following table sets forth the differences between the businesses of the Group and
CXMT Group:
The Group CXMT Group
Product
portfolio /H1118/H1118/H1118/H1118/H1118
The Group provides a diversified
product portfolio to its
customers, including specialty
memory chips (including Flash
and niche DRAM), MCU,
analog chips and sensor chips.
For further details, see
“Business — Our Products.”
CXMT Group specializes in the
research, development,
production and sales of
DRAM.
DRAM product
positioning
and customer
focus /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The Group mainly focuses on
niche DRAM, which mainly
targets downstream customers
operating in industries
including set-top boxes,
televisions, smart homes and
base stations.
CXMT Group mainly focuses on
mainstream DRAM, which is
mainly used in applications
such as servers, personal
computers and smartphones.
DRAM product
types /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The Group’s niche DRAM
offerings currently include
DDR3L, DDR4 and LPDDR4.
CXMT Group’s DRAM offerings
currently include DDR5,
LPDDR5, DDR4 (targeting
commodity market) and
LPDDR4X (targeting
commodity market).
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The Group CXMT Group
Business model /H1118The Group adopts a fabless
business model and is asset-
light. Under the fabless
business model, an enterprise
is mainly involved in the
design, research and
development and sales of its
products. Following the
completion of the design and
research and development of
its products, such enterprise
will cooperate with qualified
foundry partners for IC
fabrication and OSA T partners
for IC testing and packaging.
For further details, see
“Business — Production,
Procurement, Inventory and
Logistics — Our Fabless
Model.”
CXMT Group adopts an IDM
business model where its
DRAM products are designed,
manufactured and sold through
its own foundries, which is
asset-heavy in nature.
Industry chain
partners and
suppliers /H1118/H1118/H1118/H1118/H1118
As the Group adopts a fabless
business model, the major
industry chain partners and
suppliers of the Group are
foundry partners for IC
fabrication and OSA T partners
for IC testing and packaging.
As CXMT adopts an IDM
business model, the major
industry chain partners and
suppliers of CXMT Group are
suppliers of raw materials and
production equipment as well
as OSA T partners for IC testing
and packaging.
Based on the foregoing, the Directors are of the view that there is no actual competition
between the business of the Group and the business of CXMT Group.
Business Relationship between the Group and CXMT Group
The Group has, in its ordinary and usual course of business, entered into the following
transactions with CXMT Group which are expected to continue after the Listing.
1. Provision of DRAM by CXMT Group
As the Group adopts a fabless business model without production capacity, the Group
collaborates with qualified foundry partners for IC fabrication. In terms of DRAM, considering
(i) CXMT Group’s profound industry experience and expertise in DRAM; (ii) CXMT Group’s
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industry-leading manufacturing capabilities of DRAM and CXMT Group’s proven track record
in DRAM manufacturing; and (iii) the Group’s longstanding cooperation with CXMT Group,
as approved by the Shareholders, the Group has entered into a series of agreements with CXMT
Group since May 2020, including an agreement dated January 15, 2024, pursuant to which
CXMT Group has agreed to provide DRAM manufactured by it to the Group (collectively, the
“DRAM Provision Agreements ”). By entering into the DRAM Provision Agreements, the
Group and CXMT Group have clarified the modalities and arrangements of their cooperation,
and CXMT Group has become a reliable and stable qualified foundry partner of the Group,
allowing the Group to focus on the design and sales of its niche DRAM under the fabless
business model. Below sets forth the salient terms of the DRAM Provision Agreements:
 Cooperation modes. The Company and CXMT contemplate two cooperation modes
under the DRAM Provision Agreements: foundry sourcing and product procurement.
Under the foundry sourcing cooperation mode, CXMT Group shall use
commercially reasonable efforts to provide foundry services to the Group for the
DRAM with the Group’s design, subject to CXMT Group’s production capacity for
its own products. Under the product procurement cooperation mode, CXMT Group
may provide the Group with DRAM designed and manufactured by CXMT Group
for the Group’s future sales.
 Market focus. CXMT Group shall mainly focus on commodity market, and the
Group shall mainly focus on niche market.
 Pricing. The transactions between the Group and CXMT Group shall be made with
reference to the fair market price.
 Credit term and payment method. The credit term and payment method shall be in
accordance with the purchase order. The Group is typically offered a credit term of
14 days or monthly settlement, depending on the product type provided by CXMT
Group. Payment is usually made through wire transfer.
 Duration. The DRAM Provision Agreements shall be valid until December 31, 2030,
and shall be automatically renewed for successive terms of five years unless either
party notifies the other party in writing no later than six months prior to the expiry
of the DRAM Provision Agreements.
The transactions between the Group and CXMT Group under the DRAM Provision
Agreements are conducted on an arm-length basis, considering:
(i) the fees paid by the Group to CXMT Group for its provision of DRAM under the
DRAM Provision Agreements are determined after arm’s length negotiations
between the Group and CXMT Group, with reference to the prevailing market price
and CXMT Group’s manufacturing cost of the relevant DRAM. According to Frost
& Sullivan, the pricing approach under the DRAM Provision Agreements is in line
with the industry norm;
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(ii) the terms of the DRAM Provision Agreements, including the pricing terms, have
been reviewed by the Board and the Shareholders. Mr. Zhu Yiming and InfoGrid
Limited (where applicable) have abstained from such review process pursuant to
applicable PRC laws and regulations;
(iii) the pricing of the transactions under the DRAM Provision Agreements is negotiated
between the Group and CXMT Group on a quarterly basis. Mr. Zhu Yiming shall
abstain from such negotiation process pursuant to applicable PRC laws and
regulations; and
(iv) for each financial year, if the projected accumulated amount of the transactions
under the DRAM Provision Agreements exceeds 0.5% of the Group’s latest audited
net assets, such projected accumulated amount shall be approved by the Board as
well as the independent non-executive Directors, and Mr. Zhu Yiming shall abstain
from voting on the relevant resolutions at the Board meeting. For each financial
year, if the projected accumulated amount of the transactions under the DRAM
Provision Agreements exceeds 5% of the Group’s latest audited net assets, such
projected accumulated amount shall also be approved by the Shareholders at the
general meetings of the Company, and Mr. Zhu Yiming and InfoGrid Limited shall
abstain from voting on the relevant resolutions at the general meetings. As of the
Latest Practicable Date, the Company had complied with such internal control
measures, including, where applicable, the Shareholders’ approval for the
transactions under the DRAM Provision Agreements.
The following table sets forth the transaction amounts between the Group and CXMT
Group under the DRAM Provision Agreements by cooperation mode during the Track Record
Period:
Y ear Ended December 31,
Six Months
Ended June 30,
2022 2023 2024 2025
(in RMB thousands, except for percentages)
Foundry sourcing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118274,859 31.0% 362,539 47.2% 1,018,035 100.0% 433,482 100.0%
Product procurement /H1118/H1118/H1118/H1118/H1118/H1118612,573 69.0% 404,863 52.8% – – – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118887,432 100.0% 767,402 100.0% 1,018,035 100.0% 433,482 100.0%
2. Joint product development
The Company has entered into a joint product development platform cooperation
agreement with CXMT (as supplemented, the “ Product Development Agreement ”) in April
2020, pursuant to which the Company has agreed to license its IP rights to CXMT from time
to time, to facilitate the joint development process, in consideration that CXMT pays
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corresponding IP license fees to the Company. The amounts of the IP license fees are
determined after arm’s length negotiations between the Company and CXMT with reference to
the development costs of the relevant IP rights.
The Group only recorded approximately RMB2.3 million in 2022 in terms of the IP
license fees received from CXMT during the Track Record Period.
Corporate Governance Measures
Despite Mr. Zhu Yiming’s directorships and managerial roles in both the Company and
CXMT, the Directors are of the view that Mr. Zhu Yiming is able to devote sufficient time and
resources to manage the Group’s operations, discharge his duties as the chairman of the Board
and executive Director and act in the best interest of the Company, on the basis that:
(i) Mr. Zhu Yiming has been involved in the management and operation of the Group
since he founded the Group in April 2005. Since the inception of the Group, he has
been in charge of the overall strategic planning, business development and
enterprise management of the Group and fully discharged his duties as a Director
and the chairman of the Board by participating in the formulation of the Group’s
development strategies and the decision-making in the Group’s investments and
capital operations. During the Track Record Period and up to the Latest Practicable
Date, Mr. Zhu Yiming had attended all Board meetings of the Company. After the
Listing, Mr. Zhu Yiming is expected to, while continuing to be supported by the
experienced senior management team in the Group, devote his time to the overall
strategic planning, business development and enterprise management of the Group
as he has been historically; and
(ii) despite assuming directorships and managerial roles in both the Company and
CXMT, Mr. Zhu Yiming has been and will continue to be supported by the separate
and independent board of directors and senior management teams of the Company
and CXMT to perform his respective duties in the two companies. Accordingly, Mr.
Zhu Yiming’s positions in CXMT will not impair his ability to discharge his duties
as the chairman of the Board and executive Director of the Company.
The Board functions independently of the CXMT Board and each of the Directors is
aware of his/her fiduciary duties as a director of the Company which require, among other
things, that he/she must act for the benefit and in the best interest of the Group. In particular,
the Company has appointed five independent non-executive Directors, representing more than
half of the members of the Board, to provide a balance of the number of potentially interested
and independent Directors with a view to promoting the interests of the Company and
Shareholders as a whole. The independent non-executive Directors will be entitled to engage
professional advisors for advice on matters relating to any potential conflict of interest arising
out of any transaction to be entered into between the Company and CXMT.
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The Company has adopted relevant corporate governance measures to manage potential
conflict of interests, including but not limited to, where a Board meeting is held for the matters
in which a Director has a material interest, such Director shall abstain from voting on such
resolutions and shall not be counted in the quorum for the voting. Such corporate governance
measures will enable the Company to balance any potential conflict of interests and to
safeguard and represent the interests of the Group and the Shareholders as a whole.
INTELLECTUAL PROPERTIES
We had 1,085 patents, 226 registered trademarks, 62 copyrights and 3 domain names as
of June 30, 2025. See “Appendix IV — Statutory and General Information — Further
Information about the Business — Intellectual Property.” These intellectual properties cover
our production processes as well as the designs of our products.
We rely on a combination of intellectual property protection laws in the jurisdictions in
which we operate and contractual arrangements (including confidentiality provisions) to
establish and protect our proprietary technologies, know-how and other intellectual property
rights. Our intellectual property department is primarily responsible for protecting our
intellectual properties. We proactively manage and expand our intellectual property portfolio
and use regulations, policies, and confidentiality and non-compete agreements to protect our
intellectual properties and trade secrets. Despite our efforts, we may be subject to risks
associated with alleged infringements of third parties’ intellectual property rights, or
infringements of our intellectual property rights by third parties. See “Regulatory Overview,”
and “Risk Factors — Risks Relating to Our Business and Industry — Our patents and other
non-patented intellectual properties are valuable assets, and if we are unable to protect them
from infringement, our business prospects may be harmed.”
During the Track Record Period and up to the Latest Practicable Date, to the best of our
knowledge, we had not been subject to any material intellectual property claims that could have
a material adverse effect on our business or operations.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS
ESG Management Framework
In order to achieve scientific, systematic and standardized management for the ESG
system, we have formulated the Administrative Measures for Environmental, Social and
Governance, and established a three-level ESG management structure, consisting of the
Strategy Committee, the ESG leading group and the ESG working group. Strategy Committee,
the top decision-maker of the sustainable development management, is responsible for
decision-making on ESG-related matters. The Strategy Committee is composed of our
chairman of the Board, IC industry experts and investment experts.
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In addition, we have established a long-term ESG management framework comprising
three major mechanisms: (i) an ESG meeting mechanism, including ESG leading group
meeting, ESG working group meeting and other ESG ad hoc task meetings, (ii) a stakeholder
response mechanism, covering the receipt, organization and response to inquiries and demands,
and (iii) an information disclosure mechanism, encompassing ESG report disclosure, website
information disclosure, and media dissemination to enhance the Company’s ESG governance
standards.
Material ESG Topics
Material ESG topics serve as key focal points for the management of our sustainable
development. Following stakeholder engagement principles, we regularly conduct importance
assessments by consulting both internal and external stakeholders to determine our material
topic matrix. In 2024, the key material topics included product quality, R&D innovation, labour
rights protection, corporate governance and internal control compliance, talent cultivation and
development, customer relationships and supply chain management.
Environment
Climate change
We have established a climate change risk governance structure and policy framework,
clearly defining the responsibilities and roles of the Board, senior management, and the
executive team in addressing climate-related matters, to contribute to a more robust and
systematic governance mechanism. Furthermore, we have developed and publicly released our
Climate Change Policy on our official website. According to it, the Strategy Committee is
responsible for overseeing climate-related risks and regularly reviewing progress on related
performance, thereby ensuring that management initiatives are effectively implemented and
appropriately supervised.
We operate in the rapidly evolving semiconductor industry, where the continuous
miniaturization of transistors — the fundamental building blocks of chips — has led to both
material savings and reductions in power consumption. We closely monitor opportunities in
clean technologies and leverage our technical expertise to integrate the concept of sustainable
development into product innovation. We place great emphasis on R&D, with a strong focus
on designing and developing environmentally friendly and energy-efficient products. By
offering low-power solutions, the company helps extend product lifecycles and reduce the
environmental impact of end-user applications. Sustainability and energy efficiency are
embedded in the product design process from the outset. We take product lifespan and
application scenarios into consideration to minimize unnecessary power consumption in
circuits and reduce overall energy use.
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GHG Emissions
For the year ended December 31,
Item Unit 2022 2023 2024
Total Scope I GHG emissions /H1118/H1118/H1118tCO2e 60 226 207
Total Scope II GHG emissions /H1118/H1118tCO2e 4,643 6,095 4,906
The increase in total Scope II GHG emissions from 4,643 tCO 2e in 2022 to 6,095 tCO 2e
in 2023 was primarily due to the increased energy consumption along with our enlarged
business scale. The decrease in total Scope II GHG emission from 6,095 tCO
2e in 2023 to
4,906 tCO 2e in 2024 was primarily due to our increased use of green electricity.
In 2023, we began and successfully carried out Scope III GHG emission data collection
and disclosure for the business travel, including the Scope III GHG emission from business
travels via plane, train and taxi. In 2023 and 2024, the afore-mentioned Scope III GHG
emission for business travel amounted to 851.2 tCO
2e and 1,261.3 tCO 2e, respectively. In
2024, we continued to advance our carbon footprint management efforts. Moving forward, we
plan to further enhance our data collection and disclosure processes for Scope III emissions in
accordance with the Greenhouse Gas Protocol, adapting our reporting as more relevant data
becomes available. Specifically, in 2026, we expect to expand the scope of our ESG report
assurance to include the Scope III GHG emissions data of above-mentioned business travel. In
2027, we expect to start collecting data of employee commuting, upstream transportation and
delivery for Scope III GHG emissions. In 2028, we will attempt to disclose relevant Scope III
emission information for employee commuting, upstream transportation and delivery.
To proactively respond to the goals of Carbon Peaking and Carbon Neutrality, we
continue to pay attention to environmental protection and the development of ecological
culture. We are committed to integrating sustainable development into our business operation
and decision-making. We have established environmental protection targets to quantify our
efforts and actively monitor our environmental impact. Our goal is to reduce Scope I and Scope
II GHG emissions by 50% by 2030, compared with 2021 levels.
Energy management
We have consistently prioritized ecological and environmental protection along with the
sustainable use of resources. By integrating the principles of environmental protection and
green development into our daily operations, we have optimized the energy efficiency of our
office buildings and actively promoted energy conservation awareness. These efforts have
collectively contributed to a reduction in office energy consumption and enhanced the overall
sustainability performance of our business operations.
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In our business operations, we have taken many initiatives to improve energy efficiency
and reduce energy consumption. For example, we have successfully connected our rooftop
photovoltaic project at the Hefei office to the grid in November 2023, with an installed capacity
of 267.3 kW. In 2024, the project generated a total of 310,239 kWh of electricity, resulting in
an estimated reduction of approximately 176.929 tons of carbon-dioxide-equivalent emissions.
Moreover, prior to the renovation of the new office area, we adjusted the lighting system design
according to the guidance of WELL/LEED certification standards. We also add programmable
timers and motion sensors, along with the installation and application of a building automation
system and an intelligent power control system, to enhance the energy efficiency of our office
building. We aim to increase the proportion of green electricity in our internal electricity
consumption to over 60% by 2030.
For the year ended December 31,
Item Unit 2022 2023 2024
Purchased electricity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118kWh 8,141,929 10,687,736 12,737,024
Comprehensive energy
consumption /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
tonnes of
standard coal 1,034 1,344 1,616
Environmental compliance and waste and water resources management
We closely monitor environmental protection policies in our domestic and international
areas of operation and strictly comply with national and local laws and regulations, including
the Environmental Protection Law of the PRC (), the Energy
Conservation Law of the PRC (), and the Law of the PRC on
the Prevention and Control of Environmental Pollution by Solid Waste ( ʕശɛ͏΍ձ਷ո
). We effectively implement internal policies such as the
Environmental Factors Identification and Evaluation Procedure, the Energy and Resource
Conservation Control Procedure, and the Solid Waste Pollution Prevention and Control
Procedure. Environmental goals and targets are integrated into our management reviews to
ensure the thorough implementation of environmental management requirements. We have
obtained and maintained an ISO14001 Environmental Management System certification.
To improve water use efficiency and reduce water consumption, we have implemented the
following measures. We gradually replace traditional water dispensers with direct drinking
water machines, and regularly engage suppliers to replace filters and conduct water quality
testing. Bottled water is no longer provided based on the number of attendees at meetings,
particularly large-scale ones, but is instead supplied at no more than 70% of the expected
headcount, and placed in a central location for attendees to take as needed. Moreover,
employees and visitors are also encouraged to bring their own reusable water bottles during
meetings or events to reduce bottled water consumption and minimize water resource waste.
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We are classified as a non-key pollutant discharge unit and are not involved in the
discharge of pollutants or waste such as wastewater, exhaust gas, or noise. Despite that, we
have formulated and strictly implemented the Solid Waste Pollution Prevention and Control
Procedures and Solid Waste Classification Table to manage waste. Items such as toner
cartridges, ink cartridges, batteries, and lamps are classified as hazardous solid waste and are
stored in the Company’s hazardous waste warehouse with appropriate hazardous waste labels
affixed. Rechargeable keyboards and mice, hard drives, and similar items are treated as
electronic waste and temporarily stored in the hazardous waste warehouse. Other types of
electronic waste are collected and stored in the general warehouse. We also entered into an
agreement with a qualified environmental protection agency to entrust them with the disposal
of hazardous solid waste in compliance with relevant regulations. In 2024, a total of 0.01 tons
of hazardous waste and 0.05 tons of general industrial solid waste were generated, and lawfully
transferred and disposed of.
For the year ended December 31,
Item Unit 2022 2023 2024
Total water consumption /H1118/H1118/H1118/H1118/H1118/H1118/H1118tons 21,472 17,346 18,953
Social Responsibility
Supply Chain Management
As a fabless IC design house, we rely on our suppliers to provide us various raw
materials, components, consumables and packing. We place great emphasis on supply chain
management and are committed to establishing a responsible and sustainable green supply
chain. To this end, we have formulated a range of internal rules and regulations such as the
Supplier Control Procedures, the Supplier Review Procedures and the Supplier Basic Norms of
Packaging and Testing. We are actively advancing sustainable procurement within a green
supply chain by expanding our selection of environmentally friendly raw products. Through
rigorous verification processes, we assess whether the raw materials, consumables, and
packaging can meet relevant environmental standards. Thus, a comprehensive supplier
management system that encompasses supplier access, assessment, risk management and
withdrawal is established.
 Admission assessment . We evaluate suppliers based on our New Supplier Admission
Procedure, which includes an initial scoring assessment, followed by engineering
validation, on-site inspection, and review by the Supplier Decision Committee to
determine inclusion in our approved supplier list. In particular, we prioritize safety
and environmental protection factors in the supplier admission procedure, with the
Supplier Environmental Audit Checklist specifically ensuring compliance with the
environmental, occupational health, and safety management system, and the Quality
System & Process Review Form for Packing and Testing Suppliers covering quality
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system requirements. We plan to incorporate the use of renewable energy by
suppliers as an access requirement and will gradually promote the signing of a Green
Power Commitment among our suppliers.
 Compliance commitment . We regularly communicate environmental protection laws,
regulations, and customer requirements to our suppliers to support the green
transition of our supply chain. In collaboration with our suppliers, we actively
promote an ethical and transparent business environment. As part of our daily
operations, we carry out anti-corruption training and awareness initiatives for
suppliers and remain firmly committed to eliminating all forms of corrupt practices.
Moreover, we incorporate anti-corruption commitments into our sales and
procurement contracts to strengthen compliance awareness and promote higher
compliance standards among our customers and suppliers.
 Regular evaluation . We conduct regular supplier evaluations and actively promote
social responsibility guidelines among our suppliers, incorporating social
responsibility criteria into routine assessment processes. An ESG matters have been
added to the existing annual evaluation framework, covering key areas such as labor
rights, health and safety, environmental practices and business ethics. We regularly
assess the ESG management of our core suppliers and assesses their ESG risks every
year. For high-risk suppliers, we conduct on-site audits at least once every three
years. For suppliers receiving unsatisfactory evaluation outcomes, we provide
targeted training to support their continuous improvement and strengthen ESG
performance across the supply chain.
Occupational Health, Safety and Care
We place great importance on employees’ health and safety and continuously strengthen
our occupational health and safety management systems to ensure a healthy and safe working
environment. In 2023, we successfully completed the external surveillance assessment for ISO
45001 and updated our certification in September 2023.
We strictly comply with the Labor Law of the PRC (), the
Labor Contract Law of the PRC (), and other relevant laws and
regulations. In accordance with the relevant laws and regulations, we promote the
implementation of internal policies such as the Employment Management Standards and Labor
Contract. These efforts aim to regulate corporate operations, protect employees’ rights and
interests, and continuously optimize talent management mechanisms.
We have also systematically reviewed and refined our occupational health management.
Several internal policies and procedures have been established, including the Control
Procedure for Laws, Regulations, and Relevant Requirements, the Compliance Evaluation
Procedure, the Occupational Health and Safety Control Procedure, the Comprehensive Safety
Management System for the Working Environment, the Emergency Preparedness and Response
Procedure, and the Hazard Identification and Risk Assessment Procedure. To safeguard
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employee well-being, we arrange annual physical examinations and provide all employees with
supplementary commercial medical insurance, which covers outpatient services,
hospitalization, and accidental injuries. Moreover, we regularly conduct both online and offline
training sessions that combine theoretical knowledge with practical skills on occupational
health and safety, first aid and fire safety, aiming to continuously raise awareness and
preparedness among employees.
We also offer a competitive benefits package, including social insurance, paid leave,
holiday perks, and recreational activities. Beyond material support, we actively enrich our
employees’ cultural lives, prioritize both physical and mental well-being, remain attentive to
the needs of employees facing challenges, and strive to cultivate a harmonious and fulfilling
workplace environment.
We foster a culture rooted in equality, diversity and innovation, with zero tolerance for
discrimination. By promoting transparency, trust, honesty and inclusiveness, we create an
environment where everyone feels valued and respected.
Community Relations Management
We actively fulfill our social responsibilities, continuously support public welfare, and
contribute to serving society. Each year, we prepare a dedicated budget for public welfare
donations and continuously improve processes such as the research and evaluation of public
welfare projects, project application and approval, and donation implementation, review,
participation, and tracking and statistics, in order to enhance our social influence. In 2024, we
formulated the V olunteer Activities Management Measures to promote the smooth development
of various volunteer service activities and to protect the legitimate rights and interests of both
volunteers and service recipients.
In 2024, we invested RMB1.6 million in public welfare programs, with a total of 112
participants devoting approximately 97 hours in total.
Corporate Governance
Business Integrity
We uphold the principle of integrity and adhere to a standardized code of business
conduct. All business activities and market competition are conducted in compliance with
applicable laws and regulations, with a firm stance against commercial bribery and unfair
competition in any form. To foster a transparent and ethical business environment and
strengthen employees’ integrity and self-discipline, we have introduced the Administrative
Measures for Anti-Commercial Bribery and published the Code of Business Ethics, the
Anti-Commercial Bribery Compliance Policy, and the Reporting and Informant Protection
System on our official website. These measures clearly define the organizational structure and
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responsibilities related to anti-bribery management and establish procedures for reporting,
investigation, and accountability. We require key personnels to sign the Letter of Commitment
on Anti-Commercial Bribery, thereby upholding our reputation for integrity and ethical
conduct.
We also establish a comprehensive, multi-level anti-commercial bribery management
framework led by the Board and coordinated by the general manager. This framework includes
the Compliance Committee, the Anti-Commercial Bribery Management Department, the
Anti-Commercial Bribery Supervisory Department, and other relevant departments responsible
for the implementation of anti-bribery policies.
Moreover, we continuously conduct anti-bribery compliance risk assessments for our
business partners. Through various means such as contracts and commitment letters, we
actively communicate our anti-bribery policies to business partners and maintain ongoing
oversight throughout the contract execution periods.
DATA PRIV ACY AND CYBERSECURITY
In recent years, data privacy and cybersecurity have emerged as critical governance
priorities for companies worldwide. In particular, the PRC legislative and government
authorities regularly introduce new cybersecurity, data security and privacy laws and
regulations. Consequently, our practices regarding the collection, process and transfer of
various types of data may come under increased administrative scrutiny. See “Risk Factors —
Risks Relating to Our Business and Industry — Any failure or perceived failure to comply with
data privacy and security laws could subject us to potential liabilities.”
We collect and store business, management and transaction data generated during or in
connection with our business operations, including data related to our business and transactions
with our customers, suppliers and other relevant parties. We collect personal information of our
customers only in very limited and necessary circumstances.
We have established a comprehensive data compliance system. We have deployed more
than ten types of security systems and devices, including firewalls, internet behavior
management, antivirus softwares, network access control, data loss prevention, threat
intelligence platforms, log management, and vulnerability scanning. These tools form a layered
defense system that extends from the network perimeter to the data center and end-user
terminals. This architecture enables proactive prevention, real-time alerts during incidents, and
post-event accountability in response to cybersecurity threats.
Our information technology departments are responsible for developing and
implementing our policies and procedures relating to cybersecurity and data security.
As advised by our PRC Legal Advisors, during the Track Record Period, we complied
with applicable laws and regulations related to cybersecurity and data protection in all material
respects.
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THE IMPACT OF U.S. OUTBOUND INVESTMENT RULE
On October 28, 2024, the U.S. Department of the Treasury (“ Treasury ”) issued a final
rule, codified in the United States Code of Federal Regulations at 31 C.F.R. part 850, to
implement the Executive Order 14105 of August 9, 2023 (the “ Final Rule ”), which became
effective on January 2, 2025. See “Regulatory Overview — U.S. Outbound Investment Rule.”
As advised by DLA Piper, our Directors believe that we are likely to be deemed a Covered
Foreign Person engaged in one of the “covered activities” (including (i) semiconductors and
microelectronics, (ii) quantum information technologies, and (iii) artificial intelligence
systems) as we design integrated circuits as described in the definition of “notifiable
transactions” in 31 C.F.R. §850.217. We are not directly or indirectly engaged in any “covered
activities” as described in the definition of “prohibited transactions” (each as defined in the
Final Rule) as we do not design, fabricate or package any integrated circuit with performance
parameters of the advanced integrated circuits covered by prohibited transactions as defined by
the Final Rule. As advised by DLA Piper, U.S. persons subject to the Final Rule are prohibited
from making, or required to report, certain investments in Covered Foreign Persons, which are
defined as “Covered Transactions,” and include certain acquisitions of an equity interest,
certain debt financing, joint ventures, and certain investments as a limited partner in a non-U.S.
person pooled investment fund. U.S. persons engaged in a “Covered Transaction” that involves
the acquisition of our equity interests (including the subscription of our H Shares in the Global
Offering) may need to make a notification to Treasury pursuant to the Final Rule.
Based on the above, and that, as advised by DLA Piper, it is the responsibility of the U.S.
person engaged in a “notifiable transaction” to make a notification to Treasury pursuant to the
Final Rule, our Directors do not believe that the Final Rule is expected to have a material
adverse impact on our business, results of operations, financial condition or the Global
Offering.
However, there is no assurance that the Treasury will take the same view as ours. Future
changes in the Final Rule, the America First Memo and any related policies, laws and
regulations or their interpretations, or any similar or more expansive restrictions imposed by
the U.S. or other jurisdictions, may result in additional costs on our business and/or limit our
ability to raise capital or contingent equity capital from U.S. investors and other sources that
may otherwise be beneficial to us, which could adversely affect our performance, financial
condition and prospects, in which case the Global Offering of our H Shares may also be
materially and adversely affected. See “Risk Factors — We are exposed to risks associated with
U.S. Executive Order 14105 and its implementing regulations that prohibit and require
notification by on U.S. persons for certain investments.”
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THE IMPACT OF EAR
The Export Administration Regulation (the “ EAR”) regulates U.S. export control, and the
Bureau of Industry and Security (the “ BIS”) of the Department of Commerce administers the
EAR. The U.S. export control regime regulates the export, transfer or disclosure of U.S.
products, software, and technology to non-U.S. jurisdictions and non-U.S. persons based on the
nature of the product or technology, as well as the destination, transferee, or end-use of a
specific export or transfer.
Certain items procured by the Company, including software (such as EDA) and hardware
(such as storage systems and servers) are originated from the U.S. or meet the Direct Product
Rule or De Minimis Rule, and therefore, are subject to EAR including EAR-99 and items with
ECCNs. As advised by the DLA Piper, for items procured by us that are subject to EAR,
including software and hardware, our procurement of such items which are subject to EAR
would not require a license or would be subject to a license exemption based on the
classifications provided by the suppliers of such items, because (i) those items are nonsensitive
or relatively less sensitive, (ii) China is not an embargo country as defined by the EAR or
subject to comprehensive controls, and (iii) the Company is not a sanctioned target, and the end
use is not restricted. The procurement amounts of such items and EAR-99 Items were
RMB107.9 million, RMB38.8 million and RMB76.5 million in 2022, 2023 and 2024,
respectively, accounting for 1.93%, 0.89% and 1.45% of the total procurement amount of the
Company during the respective years. See “Regulatory Overview — Laws and Regulations
Relating to U.S. Export Controls and Sanctions — Impact on the Company.”
Based on the above, our Directors do not believe that the current U.S. export control
regime is expected to have a material adverse impact on our business, results of operations and
financial condition.
However, as the BIS rules are evolving, future sanctions and export controls may
significantly impact our business relationships with some of the key customers or suppliers.
See “Risk Factors — We are subject to risks associated with sanctions and export controls laws
and regulations, international trade policies and actions, and developing domestic and foreign
laws and regulations.”
INFORMATION TECHNOLOGY
Our information technology systems are essential to our business operations. We have
developed or employed various information technology systems covering all material aspects
of our operations, including sales, supply chain management, inventory management,
production and quality control. Our information technology department is responsible for
developing and maintaining information technology systems to support our business operations
and growth.
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Our key information technology systems are set forth below:
 Our systems applications and products system serves as our core enterprise resource
planning platform, managing key processes such as financial reporting, procurement
workflows, production planning, inventory tracking and sales order management. It
helps to refine our management and supports data-driven decision-making.
 Our customer relationship management system manages customers’ information and
sales processes. It helps to track potential customers and sales opportunities in order
to enhance efficiency, reduce human errors and enhance customer satisfaction.
 Our supplier relationship management system optimizes supply chain processes by
predicting demand, managing inventories, reducing costs and enhancing the
flexibility of the supply chain. It helps to ensure timely supply of raw materials and
products.
COMPETITION
We operate in a highly competitive market, and we compete with other chip providers in
the memory, analog and sensor chips segments, as well as with other providers in the MCU
segment. The competitive landscape is shaped by multiple factors, including the growth of our
customers and their respective industries, advancements in technology, emergence of new
materials or technology, production capacity, regulatory changes and general economic
conditions. New market participants may emerge, introducing innovative or cost-effective
products that challenge existing players. If we are unable to keep pace with such advancements
or fail to differentiate our products in terms of quality or cost, we risk losing market share to
our competitors. See “Industry Overview,” and “Risk Factors — Risks Relating to our Business
and Industry — We face competition and expect to continue facing competition in the future.
If we fail to compete effectively, our business, prospects, results of operations and financial
condition will be materially and adversely affected.”
INSURANCE
We maintain insurance policies to cover product liabilities, general liabilities and product
recall. In addition, we have purchased a number of property-related insurance policies covering
our facilities, machinery, equipment, inventories and other assets. We review our insurance
policies from time to time to assess the adequacy and breadth of coverage. We believe that our
existing insurance coverage is adequate for our business operations and is in line with industry
standards in the countries in which we operate. Nevertheless, we may be exposed to claims and
liabilities which exceed our insurance coverage. See “Risk Factors — Risks Relating to our
Business and Industry — Our insurance coverage may be insufficient to cover all of our
potential losses.”
During the Track Record Period, we did not make and were not the subject of, any
insurance claims which are material to our business or financial condition.
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PROPERTIES
As of June 30, 2025, we operated our business through four major owned properties and
17 major leased properties in China, Japan, Germany, the United States and Singapore. We
primarily use our owned and leased properties as our office premises.
As of June 30, 2025, we had no single property with a carrying amount of 15% or more
of our total assets, and on this basis, we are not required by Rule 5.01A of the Listing Rules
to include any valuation report in this prospectus. Pursuant to section 6(2) of the Companies
Ordinance (Exemption of Companies and Prospectuses from Compliance with Provisions)
Notice, this prospectus is exempted from compliance with the requirements of section
342(1)(b) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance in relation
to paragraph 34(2) of the Third Schedule to the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, which requires a valuation report with respect to all of our interests in
land or buildings.
Owned Properties
As of June 30, 2025, we owned four major properties with an aggregate gross floor area
of 25,779.0 sq.m. in China. We mainly use these properties as our office premises. As of the
same date, we had one land use right in China with a gross floor area of 13,081.36 sq.m.
Leased Properties
As of June 30, 2025, we leased 17 major properties with an aggregate gross floor area of
19,208.9 sq.m. in China, Japan, Singapore, Germany and the United States, mainly as our
office premises.
According to applicable PRC laws and regulations, the lessor and the lessee to a lease
agreement are required to file the agreement with relevant government authorities within a
prescribed time period. As of the Latest Practicable Date, with respect to six major leased
properties in China used as an office, we had not registered the lease agreements, which
required the cooperation of the property owners. Although failure to do so does not in itself
invalidate the leases, we may be subject to fines if we fail to rectify such non-compliance
within the prescribed time frame after receiving notice from the relevant PRC government
authorities. The penalty ranges from RMB1,000 to RMB10,000 for each unregistered lease, at
the discretion of the relevant authority. If we receive notice from the relevant PRC government
authorities requiring us to complete the registration within the prescribed time frame and if we
fail to do so, the maximum aggregate amount of potential administrative penalties we would
be subject to for the six lease agreements is RMB60,000. In the event that any fine is imposed
on us for our failure to register our lease agreements, we may not be able to recover such losses
from the lessors. During the Track Record Period, we did not make any provision for such
non-compliance in consideration of (i) the maximum aggregate amount of potential
administrative penalties was insignificant, and (ii) we were actively rectifying such non-
compliance, and during the Track Record Period and as of the Latest Practicable Date, we did
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not receive notice from the relevant PRC government authorities requiring us to complete the
registration. As advised by our PRC Legal Adviser, the absence of registrations will not affect
the validity of the lease agreements, nor materially and adversely affect our operations. We will
continue to make efforts to work with the property owners to rectify such non-compliance, but
it is not expected that we may fully rectify the non-compliance of the six major leased
properties before listing.
EMPLOYEES
As of June 30, 2025, we had 2,126 full-time employees, with approximately 97.7% of our
employees located in Chinese Mainland. The following table sets forth a breakdown of our
full-time employees by function as of June 30, 2025.
Function As of June 30, 2025
Number %
Sales personnel /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118253 11.9
Technical personnel /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,556 73.2
Finance personnel /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850 2.4
Operation personnel /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111897 4.6
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118170 8.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,126 100
Note:
(1) Mainly include human resources personnel, administrative personnel, legal and compliance personnel and IP
personnel.
Geographic locations As of June 30, 2025
Number %
Chinese Mainland /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,076 97.7
Overseas (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850 2.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,126 100.0
Note:
(1) Comprise the United States, Germany, Singapore, Japan and the United Kingdom.
We provide our employees with certain benefits including social insurance coverage and
other employee benefits. We enter into individual employment contracts with our employees to
cover matters such as wages, employee benefits, confidentiality and grounds for termination.
Our employees’ compensation is determined according to their job positions, technical skills,
and job performance and competition.
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We have designed a series of comprehensive training programs that align with our
strategic direction and talent development objectives. These programs combine online and
in-person learning formats to enhance employees’ job-related skills, unlock their potential, and
strengthen leadership, professional and general capabilities. We consistently optimize our
Training Management Policy based on the development needs of our business, with a strong
focus on internal talent development and the establishment of an efficient talent pipeline.
None of our employees are represented by a union or collective bargaining agreements.
We believe that we have good employment relationships with our employees. During the Track
Record Period, we did not experience any strikes, work stoppages, labor disputes or other
actions which had a material adverse effect on our business and operations.
Social Insurance and Housing Provident Funds
According to the relevant PRC laws and regulations, we are required to make
contributions to the social insurance fund and housing provident fund for the benefit of our
employees in China. See “Regulatory Overview — Regulations on Labour and Employment —
Social Insurance and Housing Provident Fund.” During the Track Record Period, we had not
made social insurance and housing provident funds for some of our employees in full in
accordance with the relevant PRC laws and Regulations. Such non-compliance was primarily
caused by the acquisition of XySemi. Prior to its acquisition in December 2024, XySemi had
not made full contributions to the social insurance fund and housing provident fund for the
benefit of its employees, nor had it taken steps to rectify this issue. Following the acquisition,
we took active measures to address the non-compliance.
Potential Legal Consequences and Latest Status
We estimate that the aggregate shortfall of social insurance and housing provident fund
contributions in 2022, 2023 and 2024 and the six months ended June 30, 2025 amounted to
approximately RMB3.2 million, RMB3.4 million, RMB3.2 million and RMB1.1 million, which
accounted for less than 0.1% of our total revenue in each year/period during the Track Record
Period and accounted for 0.2%, 2.1%, 0.3% and 0.2% of our total profits in the corresponding
years/period, respectively. As advised by our PRC Legal Advisor, pursuant to relevant PRC
laws and regulations, if we fail to pay the full amount of social insurance contributions as
required, we may be ordered to pay the outstanding social insurance premiums within a
prescribed time limit and may be subject to an overdue fine of 0.05% of the delayed payment
per day from the date on which the payment is payable. If such payment is not made within
the stipulated period, the competent authority may further impose a fine from one to three times
the amount of the overdue payment. Pursuant to relevant PRC laws and regulations, if we fail
to pay the full amount of housing provident fund as required, the housing provident fund
management center may order us to make the outstanding payment within a prescribed time
limit. If the payment is not made within such time limit, an application may be made to the
PRC courts for compulsory enforcement.
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As of June 30, 2025, the potential late payments that we may face for underpayment of
social insurance contributions and housing provident funds during the Track Record Period
amounted to approximately RMB2.5 million. If we are required to pay the full amount of social
insurance contributions and housing provident funds and such payment is not made within the
stipulated period, we may be subject to administrative penalties. In such case, the maximum
potential penalty for our underpayment of social insurance contributions and housing provident
funds during the Track Record Period and failure to make payment after being ordered to pay
within a prescribed time limit is approximately RMB18.6 million.
However, according to the Urgent Notice of the General Office of the Ministry of Human
Resources and Social Security on Effectively Implementing the Essence of the Executive
Meeting of the State Council and the Measures on the Stable Collection of Social Insurance
Contributions (֛
(ᝂՌ[2018]246 ໮)) which was promulgated on September
21, 2018, local governmental authorities are prohibited from centralized collecting of historical
unpaid social insurance premiums without authorization.
During the Track Record Period and up to the Latest Practicable Date, no administrative
action or penalty had been imposed by the relevant regulatory authorities with respect to our
social insurance and housing provident fund contributions, nor had we received any order to
settle the deficit amount. During the Track Record Period and up to the Latest Practicable Date,
we were not aware of any material complaint filed by any of our employees regarding our
social insurance and housing provident fund policy.
Moreover, under the equity acquisition agreement for the acquisition of XySemi, the
former controlling persons of XySemi committed to bear any liabilities or expenses resulting
from XySemi’s failure to fully contribute to social insurance and housing provident funds prior
to the completion of the acquisition, or to fully compensate us for such obligations.
Our PRC Legal Advisor is of the opinion that, taking into account of the applicable laws
and regulations, recent policies regarding the recovery of social insurance arrears, and the
interpretation the Supreme People’s Court, government-issued credit reports for the Company
and its principal PRC subsidiaries, conformation and undertakings from the Company and
relevant parties etc., provided that there are no significant changes in the current policies,
regulations and local government enforcement and supervision requirements related to social
insurance and housing provident fund, and no major employee complaints, reports or related
lawsuits/arbitrations are filed, we and our major subsidiaries in PRC face a remote risk of being
subject to centralized collection of underpaid contributions or significant administrative
penalties for above issues by the authorities overseeing social insurance and housing provident
fund.
In consideration of the above, during the Track Record Period, no provision had been
made to such non-compliance.
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As of July 2025, we have rectified the non-compliance by making full contributions to the
social insurance fund and housing provident fund for the relevant employees. If the relevant
authorities order us to pay the historical shortfalls of contributions to social insurance and/or
housing provident funds or take rectification measures in accordance with applicable laws and
regulations, we will make such payments or take such rectification measures promptly within
the specified period to avoid such penalties for overdue payment, and seek indemnity from the
former controlling persons of XySemi for the shortfalls raised from the acquisition as
mentioned above.
RISK MANAGEMENT AND INTERNAL CONTROL
Our future operating performance may be affected by risks relating to our business. Some
of these risks are specific to us while others relate to economic conditions and are general to
the industry in which we operate. See “Risk Factors” for a discussion of these risks.
Our Board and senior management are responsible for establishing and maintaining
adequate risk management and internal control systems. Risk management is the process
designed to identify potential events that may affect us and to keep risks within our risk
appetite. Internal control is the process designed to provide reasonable assurance regarding the
achievement of objectives related to the effectiveness and efficiency of operations, the
reliability of financial reporting and compliance with applicable laws and regulations.
Risk Management and Internal Control Policies
We have in place a robust risk management and internal control system. We have adopted
and consistently improved our internal control mechanisms to ensure the compliance of our
business operations with relevant laws and regulations and all our internal policies.
Furthermore, we conduct periodic reviews of the implementation of our risk management
policies and internal control measures to ensure their effectiveness and sufficiency.
Our Board is responsible for monitoring our internal control system, assessing its
effectiveness, and maintaining suitable and effective risk tolerance levels. The objectives of
our risk management system are to: (i) identify potential events that may impact us, ensuring
relevant risks are kept within acceptable and appropriate levels relative to our objectives; (ii)
facilitate accurate and reliable communication of information to both internal and external
stakeholders; (iii) ensure compliance with our business operations; (iv) enhance the efficiency
and effectiveness of our business activities, thereby reducing uncertainties in achieving
operational goals; and (v) establish crisis management plans for significant risks to protect us
from substantial losses due to catastrophic risks or human errors.
Our Audit Committee is responsible for reviewing the regulations and primary objectives
related to risk management, submitting comprehensive risk management reports to the Board
as needed, reviewing risk management strategies and solutions for significant risks, and
addressing other matters related to comprehensive risk management as authorized by the
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Board. Our internal audit department is tasked with overseeing the implementation of our risk
management policies and systems. Other departments and business units are coordinated and
supervised by the internal audit department in their risk management efforts.
LICENSES, PERMITS AND APPROV ALS
During the Track Record Period and up to the Latest Practicable Date, we had obtained
all requisite licenses, permits, approvals and certificates from the relevant government
authorities that are material for our business operations. We continually monitor our
compliance with these requirements in order to ensure that we have all such approvals, licenses
and permits as are necessary to operate our business.
We had not experienced any material difficulties in renewing material licenses, permits
or approvals during the Track Record Period and up to the Latest Practicable Date and do not
expect there to be any material difficulties in renewing them upon their expiry.
The following table sets forth our key licenses, approval and permits. As of the Latest
Practicable Date, the following licenses and permits are all valid.
Holder Name of license, approval and permit
The Company, GigaDevice Hefei,
Silead, GigaDevice Shanghai, XySemi
and CreMemory Technology /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Customs Declaration Entities of the
People’s Republic of China ( ʕശɛ͏΍
ձ਷ऎᗫజᗫఊЗ) and Consignee or
Consignor of Imported or Exported
Goods (ϗ೯஬ɛ)
LEGAL PROCEEDINGS
We may from time to time become a party to various legal, arbitral or administrative
proceedings arising in the ordinary course of our business. See “Risk Factors — We may from
time to time become a party to litigation, arbitration, other legal and contractual disputes,
claims and administrative proceedings.” As of the Latest Practicable Date, there was no
litigation, arbitration or administrative proceedings pending or threatened against us or any of
our Directors that could have a material and adverse effect on our financial condition or results
of operations.
During the Track Record Period and up to the Latest Practicable Date, there had been no
material breaches or violations of laws or regulations applicable to us which are expected to
have a material adverse effect on our business, financial condition or results of operations.
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The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our consolidated financial statements and
the related notes included in the Accountants’ Report in Appendix I to this prospectus.
Our consolidated financial statements have been prepared in accordance with IFRS
Accounting Standards.
The following discussion and analysis contain forward-looking statements that
involve risks and uncertainties. These statements are based on assumptions and analysis
made by us in light of our experience and perception of historical trends, current
conditions and expected future developments, as well as other factors we believe are
appropriate under the circumstances. You should not place undue reliance on any such
statements. Our actual future results and timing of selected events could differ materially
from those anticipated in these forward-looking statements as a result of various factors,
including those set forth under “Risk Factors,” “Forward-Looking Statements” and
elsewhere in this prospectus.
For the purpose of this section, unless the context otherwise requires, reference to
the years of 2022, 2023 and 2024 refer to the years ended December 31, 2022, 2023 and
2024, respectively.
OVERVIEW
We are an IC design house for a diverse range of chips. We provide customers with a
diverse range of chips, including Flash, niche DRAM, MCU, analog chips and sensor chips, as
well as a complete set of systems and solutions, including corresponding algorithms and
software. We implement the fabless business model, focusing on IC design and R&D to
maintain our technological advantages. According to Frost & Sullivan, in terms of sales in
2024, we are the only IC design house that ranks top 10 globally in all NOR Flash, SLC NAND
Flash, niche DRAM and MCU.
In 2022, 2023 and 2024 and the six months ended June 30, 2024 and 2025, we recorded
revenue of RMB8,130.0 million, RMB5,760.8 million, RMB7,356.0 million, RMB3,609.0
million and RMB4,150.3 million, respectively. During the same years/period, we recorded
adjusted net profit (a non-IFRS measure) of RMB2,256.1 million, RMB258.3 million,
RMB1,259.9 million, RMB581.8 million and RMB672.5 million, respectively, with adjusted
net profit margin (a non-IFRS measure) of 27.7%, 4.5%, 17.1%, 16.1% and 16.2%,
respectively.
SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our business, results of operations and financial condition are affected by a number of
general factors influencing the overall global semiconductor industry. These factors include
macro-economic trends, industry development and competitive landscape in the market.
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In addition to these general factors, our results of operations are affected by the following
specific factors:
Industry Cycle
As an IC design house, our business and financial performance are closely tied to the
cyclical nature of the semiconductor industry. This inherent cycle typically comprises recurring
phases of expansion, peak, downturn and recovery. The cycle is driven by a variety of factors,
including macroeconomic conditions, capital expenditure trends, technology transitions,
inventory adjustments, and adjustment in end-market demand and supply structure. In
particular, according to Frost & Sullivan, the overall semiconductor industry were at a
downturn phase from 2023, featured by inventory buildup, weakened consumer demand, and
falling price across different products. Such downturn was primarily driven by destocking by
downstream participants, following the inventory buildup in 2021 and 2022 caused by supply
shortage then. The downstream destocking intensified the market competition and, in turn,
resulted in a notable decrease in the selling prices of IC products in 2023. In 2024, the industry
began to show signs of an uneven recovery across certain end markets, while the competition
in those markets remain intense. The market prices of IC products were still lower than their
peak in 2022. See “Industry Overview — Industry Cycle.” The industry cycle has had, and will
continue to have, a significant impact on the demand for and pricing of our various types of
chips on offer.
Taking a more granular view, at any given time, different sectors within the
semiconductor industry may be at different phases of the cycle, due to the intricate interactions
of the various factors mentioned above in different sectors. Among the various factors,
end-markets developments have had a more pronounced effect on the industry cycle and
therefore our financial performance. For example, according to Frost & Sullivan, the market
demand in consumer electronics were weakened since early 2022, while the demand in
industrial applications (such as industrial automation, energy storage and battery management)
and automobile remained relative strong until the end of 2022, which resulted in a strong sales
of our Flash for automobile and industrial applications (such as industrial automation, energy
storage and battery management) in 2022. This partially offset the decrease in sales of our
Flash chips for consumer electronics end use. In 2024, following the inventory drawdown in
2022 and 2023, several end markets, such as consumer electronics and industrial applications
(for example, industrial automation, energy storage and battery management), have
experienced gradual recovery, which resulted in increase in our sales volume of our products
for those end-markets.
Affected by such downturns and uneven recovery across different end markets during the
Track Record Period, the selling prices of our products declined sharply from 2022 to 2023,
followed by a slowdown in the downward trend and signs of stabilization in 2024.
We have a diverse product portfolio, including specialty memory chips, MCU, analog
chips and sensor chips, which are incorporated in end products for a wide range of end markets,
such as consumer electronics, automobiles, industry, PC and servers, IoT and network
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communications. We expect to continue to broaden our product portfolio to enhance our
resilience against fluctuations and capture the growth opportunities presented by different
end-markets, as cyclical softness in one end market may be partially offset by resilience or
growth in others.
Development and Market Acceptance of End Products
Our products are designed for applications across a wide spectrum of end markets,
including consumer electronics, automobiles, industry, PC and servers, IoT and network
communications. The development and market acceptance of end products within these
markets can have a significant and direct impact on our business and financial results. These
markets are characterized by intense competition and are largely driven by the evolving needs
and preferences of the end users.
The continuous innovation and evolution of end products often introduce new and more
complex technical requirements for our semiconductor solutions. For example, the
proliferation of edge AI applications necessitates advanced chip designs with high-
performance and low energy consumption. To stay ahead in this dynamic environment, we must
proactively develop and launch new or enhanced products that meet these emerging demands
and maintain our competitive edge.
Moreover, our success remain subject to the commercial success of end products
incorporating our products, which in turn depends on broader factors such as end-user
preferences, pricing, brand reputation, and overall economic conditions affecting end users.
Development of new products and end uses can generate significant growth opportunities for
us. See “Industry Overview” for further details. Conversely, a decline in demand for certain
end products could lead to reduced orders for our products.
Product Mix
We have a diversified product portfolio includes specialty memory chips, MCU, analog
chips and sensor chips. Within each product category, we offer multiple series with different
specifications to meet the specific performance and functional requirements of different
application scenarios.
The selling prices and gross profit margin of different products category and series are
different due to, among others, the differences in product complexity, R&D investment and
costs. Our product mix may change in response to the market condition and technological
changes in the end markets to which our products are adopted. Significant changes in product
mix can directly affected our profitability due to varying gross profit margin attributable to
different products and series, which in turn affects our results of operations.
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Supply Chain Management
Supply chain management capabilities have a direct and significant impact on our
business results of operations. As an IC design house adopting the fabless business model, we
rely on third-party foundries for wafer fabrication and OSA T partners for testing and
packaging. Building strong and long-term partnerships with key production partners is
essential. These relationships can secure access to more stable capacity allocation, as well as
foster close collaboration with our partners on the production end. In particular, capacity
allocation, reservation and production scheduling are vital during periods of high industry
demand. Accurate forecasting and communication of wafer demands can also help us avoid
costly delays and supply bottlenecks.
Moreover, effective coordination with production partners allows us to optimize the
production process, streamline backend operations, reduce cycle times and improve time-to-
market, which is crucial for capturing market opportunities and staying ahead of competitors.
Optimizing procurement lead times for critical materials and services, such as wafers, and
packaging and testing services, minimizes inventory holding costs while ensuring continuous
production flow.
Operational Efficiency
Our ability to manage and improve our operational efficiency can significantly affect our
profitability and results of operations. Our operating expenses primarily consist of R&D
expenses, administrative expenses and selling and distribution expenses.
R&D are critical to maintaining our market position and to the sustained growth of our
business by ensuring that we can continue to meet the evolving downstream needs of our
products. As a result of consistent investment in R&D activities, our R&D expenses increased
from RMB935.6 million in 2022 to RMB990.0 million in 2023, and further increased to
RMB1,122.4 million in 2024, which accounted for 11.5%, 17.2% and 15.3% of our total
revenue during the same years. Our R&D investment have resulted in various technological
achievements. See “Business — Our Strengths — Our Diverse Range of Chip Design and
Strong R&D capabilities.” As the semiconductor industry is subject to constant and rapid
changes in technology, constant product and technology upgrade, frequent new product
introductions and evolving technical standards, we expect to continue investing in R&D
activities to maintain and enhance our competitive strength. However, there is no guarantee
that our investment in R&D will eventually result in desirable outcome, or we are able to
successfully commercialize our R&D results. If that happens, our results of operations would
be adversely affected. See “Risk Factors — Risks Relating to Our Business and Industry —
Our R&D efforts are not guaranteed to yield the results we anticipate.”
The effectiveness of our selling and marketing activities and management are also crucial
for our business. In 2022, 2023 and 2024 and the six months ended June 30, 2024 and 2025,
our selling and distribution expenses were RMB265.9 million, RMB270.5 million, RMB370.9
million, RMB170.5 million and RMB224.4 million, respectively, accounting for 3.3%, 4.7%,
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5.0%, 4.7% and 5.4% of our total revenue in the corresponding years/periods. During the same
years/periods, our administrative expenses were RMB498.5 million, RMB397.6 million,
RMB525.7 million, RMB239.4 million and RMB313.7 million, respectively, accounting for
6.1%, 6.9%, 7.1%, 6.6% and 7.6% of our total revenue in the corresponding years/periods. We
are committed to improve the effectiveness of our selling and marketing activities and our
management.
BASIS OF PRESENTATION
Our historical financial information has been prepared in accordance with IFRS
Accounting Standards as issued by the International Accounting Standards Board (“IASB”).
The IASB has issued a number of new and revised IFRS Accounting Standards. For the purpose
of preparing our historical financial information, we have adopted all applicable new and
revised IFRS Accounting Standards to the Track Record Period, except for any new standards
or interpretations that are not yet effective for the Track Record Period.
The measurement basis used in the preparation of the historical financial statement is the
historical cost basis except for financial assets and liabilities measured at FVPL and equity
securities designated at FVOCI are stated at their fair value.
See notes 1 and 2 to “Appendix I — Accountants’ Report.”
MATERIAL ACCOUNTING POLICIES AND ESTIMATES
Note 2 to “Appendix I — Accountants’ Report” to this prospectus sets forth certain
material accounting policy information, which are important for understanding our financial
conditions and results of operations.
The preparation of the historical financial information in conformity with IFRS
Accounting Standards requires our management to make judgements, estimates and
assumptions that affect the application of policies and reported amounts of assets, liabilities,
income and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements about carrying
values of assets and liabilities that are not readily apparent from other sources. Actual results
may differ from these estimates. The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period of the revision and
future periods if the revision affects both current and future periods. See note 3 to “Appendix
I — Accountants’ Report.”
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RESULTS OF OPERATIONS
Y ear Ended December 31, Six Months Ended June 30,
2022 2023 2024 2024 2025
(in RMB thousands, except for percentages)
(Unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,129,992 100.0% 5,760,823 100.0% 7,355,978 100.0% 3,609,037 100.0% 4,150,309 100.0%
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,432,776) (54.5)% (4,014,515) (69.7)% (4,732,760) (64.3)% (2,308,838) (64.0)% (2,617,583) (63.1)%
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H11183,697,216 45.5% 1,746,308 30.3% 2,623,218 35.7% 1,300,199 36.0% 1,532,726 36.9%
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118519,300 6.4% 424,401 7.4% 549,914 7.5% 240,110 6.7% 199,744 4.8%
Selling and distribution
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(265,878) (3.3)% (270,498) (4.7)% (370,907) (5.0)% (170,496) (4.7)% (224,353) (5.4)%
Administrative expenses /H1118 (498,549) (6.1)% (397,553) (6.9)% (525,678) (7.1)% (239,438) (6.6)% (313,747) (7.6)%
Research and
development expenses /H1118 (935,584) (11.5)% (989,953) (17.2)% (1,122,389) (15.3)% (588,268) (16.3)% (567,680) (13.7)%
Impairment loss on trade
and other receivables /H1118/H1118 (743) (0.0)% (820) (0.0)% (3,667) (0.0)% (2,133) (0.1)% (465) (0.0)%
Impairment loss on
property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – – – – (3,810) (0.1)%
Impairment loss on
intangible assets /H1118/H1118/H1118/H1118 – – (2,630) (0.0)% – – – – (1,903) (0.0)%
Impairment loss on
goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(241,491) (3.0)% (373,372) (6.5)% – – – – – –
Profit from operations /H1118/H11182,274,271 28.0% 135,883 2.4% 1,150,491 15.6% 539,974 15.0% 620,512 15.0%
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,889) (0.1)% (7,115) (0.1)% (19,253) (0.3)% (9,313) (0.3)% (14,087) (0.3)%
Share of profits less
losses of associates /H1118/H1118/H1118(3,957) (0.0)% (4,020) (0.1)% (7,575) (0.1)% (2,784) (0.1)% (10,346) (0.2)%
Profit before taxation /H1118/H11182,262,425 27.8% 124,748 2.2% 1,123,663 15.3% 527,877 14.6% 596,079 14.4%
Income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(209,543) (2.6)% 36,393 0.6% (22,782) (0.3)% (10,877) (0.3)% (8,244) (0.2)%
Profit for the
year/period /H1118/H1118/H1118/H1118/H1118/H11182,052,882 25.3% 161,141 2.8% 1,100,881 15.0% 517,000 14.3% 587,835 14.2%
Attributable to:
Equity shareholders of
the Company /H1118/H1118/H1118/H1118/H11182,052,882 25.3% 161,141 2.8% 1,102,543 15.0% 517,000 14.3% 575,476 13.9%
Non-controlling
interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – (1,662) (0.0)% – – 12,359 0.3%
FINANCIAL INFORMATION
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--- page 263 ---
NON-IFRS MEASURES
To supplement our consolidated financial statements that are presented in accordance
with IFRS Accounting Standards, we also use non-IFRS measures, including adjusted net profit
(a non-IFRS measure) and adjusted net profit margin (a non-IFRS measure), as additional
financial metrics, which are not required by, or presented in accordance with IFRS Accounting
Standards. We believe that these non-IFRS measures facilitate comparisons of operating
performance from period to period by eliminating potential impact of certain items. We believe
that these measures provide useful information to investors and others in understanding and
evaluating our consolidated financial statements in the same manner as they help our
management. However, our presentation of adjusted net profit (a non-IFRS measure) and
adjusted net profit margin (a non-IFRS measure) may not be comparable to similar item
measures presented by other companies. The use of these non-IFRS measures has limitations
as an analytical tool, and you should not consider them in isolation from, or as substitute for
analysis of, our consolidated financial statements or financial condition as reported under IFRS
Accounting Standards. We define adjusted net profit (a non-IFRS measure) as profit for the
year adjusted for share-based payments (a non-cash item) and listing expenses. We define
adjusted net profit margin (a non-IFRS measure) as adjusted net profit (a non-IFRS measure)
as a percentage of our total revenue.
For the years ended December 31,
For the six months ended
June 30,
2022 2023 2024 2024 2025
(in RMB thousands, except for percentages)
(Unaudited)
Profit for the year/period /H1118/H11182,052,882 161,141 1,100,881 517,000 587,835
Adjusted for:
Share-based payment
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118203,181 97,138 159,034 64,754 84,060
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 5 6 3
Adjusted net profit (a
non-IFRS measure) /H1118/H1118/H11182,256,063 258,279 1,259,915 581,754 672,458
Adjusted net profit margin
(a non-IFRS measure) /H1118/H1118 27.7% 4.5% 17.1% 16.1% 16.2%
PRINCIPAL COMPONENTS OF RESULTS OF OPERATIONS
Revenue
During the Track Record Period, we primarily generated revenue from the sales of
specialty memory chips, MCU, analog chips and sensor chips. Our revenue was recorded net
of rebate.
FINANCIAL INFORMATION
– 253 –


--- page 264 ---
By Product
Y ear Ended December 31, Six Months Ended June 30,
2022 2023 2024 2024 2025
(in RMB thousands, except for percentages)
(Unaudited)
Specialty memory chips /H1118 4,825,856 59.3% 4,077,311 70.8% 5,194,173 70.6% 2,604,520 72.2% 2,844,934 68.5%
NOR Flash /H1118/H1118/H1118/H1118/H1118/H1118/H11183,539,704 43.5% 2,995,404 52.0% 3,754,233 51.0% 1,833,014 50.8% 2,034,156 48.9%
DRAM (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118998,790 12.3% 809,973 14.1% 1,073,145 14.6% 559,532 15.5% 637,197 15.4%
NAND Flash /H1118/H1118/H1118/H1118/H1118/H1118287,362 3.5% 271,934 4.7% 366,795 5.0% 211,974 5.9% 173,581 4.2%
MCU /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,825,357 34.8% 1,312,209 22.8% 1,690,547 23.0% 802,115 22.2% 959,106 23.1%
Sensor chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118434,974 5.4% 352,449 6.1% 448,300 6.1% 192,173 5.3% 193,193 4.7%
Analog chips /H1118/H1118/H1118/H1118/H1118/H1118/H11183,851 0.0% 4,604 0.1% 15,468 0.2% 3,098 0.1% 152,276 3.7%
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,954 0.5% 14,250 0.2% 7,490 0.1% 7,131 0.2% 800 0.0%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,129,992 100.0% 5,760,823 100.0% 7,355,978 100.0% 3,609,037 100.0% 4,150,309 100.0%
Notes:
(1) Including the revenue from sales of DRAM designed and manufactured by CXMT Group in 2022 and the first
half of 2023.
(2) Mainly including technical services and license fees for our IPs.
Y ear Ended December 31, Six Months Ended June 30,
2022 2023 2024 2024 2025
Sales
volume
Average
Selling
Price (1)
Sales
volume
Average
Selling
Price (1)
Sales
volume
Average
Selling
Price (1)
Sales
volume
Average
Selling
Price (1)
Sales
volume
Average
Selling
Price (1)
(Unit’000) (RMB) (Unit’000) (RMB) (Unit’000) (RMB) (Unit’000) (RMB) (Unit’000) (RMB)
Specialty memory
chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,259,645 2.14 2,655,166 1.54 3,553,167 1.46 1,782,319 1.46 2,147,891 1.32
NOR Flash /H1118/H1118/H1118/H1118/H11182,180,800 1.62 2,532,962 1.18 3,335,830 1.13 1,660,268 1.10 2,034,441 1.00
DRAM (2) /H1118/H1118/H1118/H1118/H1118/H111844,987 22.20 66,527 12.18 133,453 8.04 69,429 8.06 73,210 8.70
NAND Flash /H1118/H1118/H1118/H111833,858 8.49 55,677 4.88 83,884 4.37 52,622 4.03 40,240 4.31
MCU /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118343,535 8.22 276,089 4.75 409,251 4.13 190,535 4.21 242,546 3.95
Sensor chips /H1118/H1118/H1118/H1118/H1118/H1118157,130 2.77 178,811 1.97 267,983 1.67 107,633 1.79 119,979 1.61
Analog chips /H1118/H1118/H1118/H1118/H11182,796 1.38 11,625 0.40 131,183 0.12 34,784 0.09 958,420 0.16
Notes:
(1) Average selling price is calculated through dividing revenue by the relevant sales volume during the same
years/periods, which represented the average price at which our products were sold to our customers.
(2) Also comprise the sales of DRAM designed and manufactured by CXMT Group in 2022 and the first half of
2023.
FINANCIAL INFORMATION
– 254 –


--- page 265 ---
The business and financial performance of participants in IC markets are closely tied to
the cyclical nature of the semiconductor industry. In particular, from 2021 to 2022, the IC
industry experienced a global shortage mainly caused by soaring demand from remote work
and online learning, supply disruptions and slow expansion of production capacity by major
manufacturers. Such supply shortage drove downstream companies to increase their inventory
levels in anticipation of the ongoing supply shortages and constraint, which in turn drove the
continuous increase in selling prices of the IC products in the market which reached their peak
in recent years during that period. Such accumulation of inventories by downstream companies
also resulted in an inventory buildup throughout the supply chain, leading to elevated inventory
levels by the end of 2022. Following such inventory buildup in 2022, the overall semiconductor
industry entered into a downturn phase, featured by weakened demand and falling price across
different products, primarily driven by destocking of downstream participants from 2023.
Following the continuous destocking and the alleviation of the impact from COVID-19 in
2024, the industry began to show signs of an uneven recovery cross certain end markets, while
the competition in those markets remain intense primarily due to the recovery and release of
production capacity of the upstream manufacturers.
As such, the market prices of IC products were still lower than their peak in 2022. See
“Industry Overview — Industry Cycle.” Affected by such downturns and uneven recovery
across different end markets during the Track Record Period, the sales volume of our different
products experienced fluctuation during the same period, and the selling prices of our products
declined sharply from 2022 to 2023, followed by a slowdown in the downward trend and signs
of stabilization in 2024. As a result, our revenue decreased from RMB8,130.0 million in 2022
to RMB5,760.8 million in 2023, which increased to RMB7,356.0 million in 2024. Our revenue
increased from RMB3,609.0 million in the six months ended June 30, 2024 to RMB4,150.3
million in the six months ended June 30, 2025, primarily due to the further recovery of the
markets and an increase in our sales of analog chips as a result of our acquisition of XySemi
by the end of 2024.
By Sales Channel
During the Track Record Period, we established a sales network comprising (i) distributor
sales, and (ii) direct sales.
Y ear Ended December 31, Six Months Ended June 30,
2022 2023 2024 2024 2025
(in RMB thousands, except for percentages)
(Unaudited)
Distributor sales /H1118/H1118/H1118/H1118/H11187,265,341 89.4% 5,214,706 90.5% 6,553,179 89.1% 3,167,689 87.8% 3,751,679 90.4%
Direct sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118864,651 10.6% 546,117 9.5% 802,799 10.9% 441,348 12.2% 398,630 9.6%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,129,992 100.0% 5,760,823 100.0% 7,355,978 100.0% 3,609,037 100.0% 4,150,309 100.0%
FINANCIAL INFORMATION
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--- page 266 ---
By Geographical Location
Y ear Ended December 31, Six Months Ended June 30,
2022 2023 2024 2024 2025
(in RMB thousands, except for percentages)
(Unaudited)
Chinese Mainland (1) /H1118/H1118/H11181,663,528 20.5% 1,331,795 23.1% 1,923,578 26.1% 912,620 25.3% 1,265,554 30.6%
Other regions or
countries (1)
Hong Kong /H1118/H1118/H1118/H1118/H1118/H1118/H11184,343,530 53.4% 2,915,429 50.6% 3,374,412 45.9% 1,690,814 46.8% 1,852,330 44.6%
Taiwan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118971,430 11.9% 892,786 15.5% 1,177,028 16.0% 555,400 15.4% 616,093 14.8%
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,151,504 14.2% 620,813 10.8% 880,960 12.0% 450,203 12.5% 416,332 10.0%
Sub-total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,466,464 79.5% 4,429,028 76.9% 5,432,400 73.9% 2,696,417 74.7% 2,884,755 69.4%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,129,992 100.0% 5,760,823 100.0% 7,355,978 100.0% 3,609,037 100.0% 4,150,309 100.0%
Notes:
(1) Geographical location is solely based on the places of registration of our customers.
(2) Comprise 23 countries/regions in total during the Track Record Period, mainly including Japan, South Korea
and Singapore.
According to Frost & Sullivan, in the semiconductor industry, customers typically prefer
to order electronic components through their Hong Kong subsidiaries due to supply chain
management considerations, for example, streamlined customs clearance, tax and payment
flexibility, efficient inventory consolidation and logistics and compliant export controls.
FINANCIAL INFORMATION
– 256 –


--- page 267 ---
Cost of Sales
Our cost of sales primarily consists of (i) cost of wafers, (ii) cost of packaging and testing,
(iii) others, mainly include the depreciation of property, plant and equipment, such as masks,
and amortization of intangible assets, such as licensed IPs and logistics expenses, and (iv) the
write-down of inventories.
Y ear Ended December 31, Six Months Ended June 30,
2022 2023 2024 2024 2025
(in RMB thousands, except for percentages)
(Unaudited)
Cost of wafers /H1118/H1118/H1118/H1118/H1118/H11183,281,654 74.0% 2,872,854 71.5% 3,262,675 69.0% 1,615,473 70.0% 1,851,752 70.8%
Cost of packaging and
testing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118853,427 19.3% 765,521 19.1% 1,107,100 23.4% 535,814 23.2% 655,249 25.0%
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118120,275 2.7% 139,433 3.5% 190,850 4.0% 80,684 3.5% 98,975 3.8%
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,255,356 96.0% 3,777,808 94.1% 4,560,625 96.4% 2,231,971 96.7% 2,605,976 99.6%
Write-down of
inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118177,420 4.0% 236,707 5.9% 172,135 3.6% 76,867 3.3% 11,607 0.4%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,432,776 100.0% 4,014,515 100.0% 4,732,760 100.0% 2,308,838 100.0% 2,617,583 100.0%
According to Frost & Sullivan, the cost of wafers is more directly influenced by market
price fluctuations within the industry cycle, whereas the cost of testing and packaging tends to
be less affected by such changes. Affected by the downturns caused by the oversupply from
2023 and uneven recovery across different end markets during the Track Record Period, the
unit wafer costs decreased from 2022 to 2023, followed by a slowdown in the downward trend
in 2024. However, the unit packaging and testing costs remained relatively stable during the
same years. As a result, cost of wafers as a percentage of our total cost of sales decreased
throughout the Track Record Period.
During the Track Record Period, we recorded write-down of inventories due to the lower
estimated realizable value of our inventories than their costs, as a result of the continuous
decrease in market price of our products as affected by the downturn caused by the oversupply
since 2023. Due to the continuous decrease in selling prices of our products, we recorded
write-down of inventories of RMB177.4 million, RMB236.7 million, RMB172.1 million in
2022, 2023 and 2024, respectively. Due to the gradual stabilization of the selling price since
2024, the write-down of inventories decreased by 84.9% from RMB76.9 million in the six
months ended June 30, 2024 to RMB11.6 million in the six months ended June 30, 2025.
FINANCIAL INFORMATION
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--- page 268 ---
Gross Profit and Gross Profit Margin
By Product
Y ear Ended December 31, Six Months Ended June 30,
2022 2023 2024 2024 2025
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
(in RMB thousands, except for percentages)
(Unaudited)
Specialty memory
chips /H1118/H1118/H1118/H1118/H1118/H1118/H11181,934,749 40.1% 1,344,959 33.0% 2,091,500 40.3% 1,022,009 39.2% 1,095,377 38.5%
MCU /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,833,903 64.9% 569,404 43.4% 621,085 36.7% 309,217 38.6% 357,879 37.3%
Sensor chips /H1118/H1118/H1118/H1118/H111871,168 16.4% 56,382 16.0% 73,797 16.5% 38,340 20.0% 30,941 16.0%
Analog chips /H1118/H1118/H1118/H1118959 24.9% (1,923) (41.8%) 1,628 10.5% 465 15.0% 59,361 39.0%
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,857 84.7% 14,193 99.6% 7,343 98.0% 7,035 98.7% 775 96.9%
Subtotal/Overall /H1118/H11183,874,636 47.7% 1,983,015 34.4% 2,795,353 38.0% 1,377,066 38.2% 1,544,333 37.2%
Write-down of
inventories /H1118/H1118/H1118/H1118(177,420) N/A (236,707) N/A (172,135) N/A (76,867) N/A (11,607) N/A
Total/Overall /H1118/H1118/H1118/H11183,697,216 45.5% 1,746,308 30.3% 2,623,218 35.7% 1,300,199 36.0% 1,532,726 36.9%
By Sales Channel
Y ear Ended December 31, Six Months Ended June 30,
2022 2023 2024 2024 2025
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
(in RMB thousands, except for percentages)
(Unaudited)
Distributor sales /H1118/H1118/H11183,464,213 47.7% 1,783,113 34.2% 2,457,350 37.5% 1,201,992 37.9% 1,383,278 36.9%
Direct sales /H1118/H1118/H1118/H1118/H1118410,423 47.5% 199,902 36.6% 338,003 42.1% 175,074 39.7% 161,055 40.4%
Subtotal/Overall /H1118/H11183,874,636 47.7% 1,983,015 34.4% 2,795,353 38.0% 1,377,066 38.2% 1,544,333 37.2%
Write-down of
inventories /H1118/H1118/H1118/H1118(177,420) N/A (236,707) N/A (172,135) N/A (76,867) N/A (11,607) N/A
Total/Overall /H1118/H1118/H1118/H11183,697,216 45.5% 1,746,308 30.3% 2,623,218 35.7% 1,300,199 36.0% 1,532,726 36.9%
FINANCIAL INFORMATION
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--- page 269 ---
In 2023 and 2024, the gross profit margin from our direct sales was higher than distributor
sales, primarily because the majority of prices to direct customer were generally higher than
the prices to the distributors which were typically on wholesale basis. However, in 2022, the
gross profit margin of our direct sales and distributor sales were similar primarily due to the
affect from product mix.
By Geographical Location
Y ear Ended December 31, Six Months Ended June 30,
2022 2023 2024 2024 2025
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
(in RMB thousands, except for percentages)
(Unaudited)
Chinese
Mainland (1) /H1118/H1118/H1118/H1118671,001 40.3% 381,352 28.6% 575,384 29.9% 275,981 30.2% 359,691 28.4%
Other regions or
countries (1) /H1118/H1118/H1118/H1118
Hong Kong /H1118/H1118/H1118/H11182,043,277 47.0% 844,100 29.0% 1,109,122 32.9% 572,319 33.8% 624,985 33.7%
Taiwan /H1118/H1118/H1118/H1118/H1118/H1118491,883 50.6% 393,804 44.1% 566,648 48.1% 257,719 46.4% 306,865 49.8%
Others (2) /H1118/H1118/H1118/H1118/H1118668,475 58.1% 363,759 58.6% 544,199 61.8% 271,047 60.2% 252,792 60.7%
Sub-total /H1118/H1118/H1118/H1118/H1118/H11183,203,635 49.5% 1,601,663 36.2% 2,219,969 40.9% 1,101,085 40.8% 1,184,642 41.1%
Write-down of
inventories /H1118/H1118/H1118/H1118(177,420) N/A (236,707) N/A (172,135) N/A (76,867) N/A (11,607) N/A
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,697,216 45.5% 1,746,308 30.3% 2,623,218 35.7% 1,300,199 36.0% 1,532,726 36.9%
Notes:
(1) Geographical location is solely based on the places of registration of our customers.
(2) Comprise 23 countries/regions in total during the Track Record Period, mainly including Japan, South Korea
and Singapore.
During the Track Record Period, the gross profit margin from sales to other countries or
regions was generally higher than that in Chinese Mainland, primarily due to a different
product mix in those regions, which typically have a higher proportion of products, such as Nor
Flash, with a higher gross profit margin.
Other Income
Our other income primarily include (i) interest income mainly generated from our
deposits with banks, (ii) foreign exchange differences from the conversion of monetary items
denominated in foreign currencies into the functional currency, (iii) government grants, and
FINANCIAL INFORMATION
– 259 –


--- page 270 ---
(iv) net gains from financial assets and liabilities measured at FVPL mainly from our wealth
management products. There are no unfulfilled conditions or contingencies relating to the
government grants. See note 5 to “Appendix I — Accountants’ Report.”
In 2022, 2023 and 2024 and the six months ended June 30, 2024 and 2025, our other
income amounted to RMB519.3 million, RMB424.4 million, RMB549.9 million, RMB240.1
million and RMB199.7 million, representing 6.4%, 7.4%, 7.5%, 6.7% and 4.8% of our total
revenue for the respective years/periods.
Selling and Distribution Expenses
Our selling and distribution expenses primarily include (i) salaries, compensations and
benefits for personnel engaging in the sales and marketing function, (ii) professional service
fees for commission in relation to the promotional activities of our products, (iii) marketing
expenses in relation to advertising and promotion expenses, (iv) traveling expenses, and (v)
others, mainly include depreciation and amortization and business development expenses.
Y ear Ended December 31, Six Months Ended June 30,
2022 2023 2024 2024 2025
(in RMB thousands, except for percentages)
(Unaudited)
Salaries, compensations
and benefits /H1118/H1118/H1118/H1118/H1118/H1118189,598 71.3% 174,933 64.7% 266,018 71.8% 127,323 74.7% 164,606 73.4%
Professional service fees /H1118 46,430 17.5% 53,082 19.6% 56,587 15.3% 24,116 14.1% 30,857 13.8%
Marketing expenses /H1118/H1118/H1118/H111810,886 4.1% 14,204 5.3% 13,888 3.7% 5,537 3.2% 7,661 3.4%
Traveling expenses /H1118/H1118/H1118/H11184,615 1.7% 13,605 5.0% 15,747 4.2% 6,359 3.7% 9,353 4.2%
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,349 5.4% 14,674 5.4% 18,667 5.0% 7,161 4.3% 11,876 5.2%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118265,878 100.0% 270,498 100.0% 370,907 100.0% 170,496 100.0% 224,353 100.0%
as % of total revenue /H1118/H1118 3.3% 4.7% 5.0% 4.7% 5.4%
Administrative Expenses
Our administrative expenses primarily include (i) salaries, compensations and benefits for
personnel engaging in administrative function, (ii) depreciation and amortization for properties
and equipment related to administrative function, (iii) service fees mainly for professional
services and IT services, (iv) taxes and additional charges, (v) office expenses, (vi) logistics
expenses, and (vi) others, mainly include lease expenses, recruitment expenses and utility
expenses.
FINANCIAL INFORMATION
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Y ear Ended December 31, Six Months Ended June 30,
2022 2023 2024 2024 2025
(in RMB thousands, except for percentages)
(Unaudited)
Salaries, compensations
and benefits /H1118/H1118/H1118/H1118/H1118/H1118271,566 54.5% 194,499 48.9% 307,791 58.6% 143,674 60.0% 191,565 61.1%
Depreciation and
amortization /H1118/H1118/H1118/H1118/H1118/H111845,119 9.1% 64,636 16.3% 60,049 11.4% 31,393 13.1% 41,408 13.2%
Service fees /H1118/H1118/H1118/H1118/H1118/H1118/H111852,189 10.5% 55,745 14.0% 50,680 9.6% 18,820 7.9% 19,375 6.2%
Taxes and additional
charges /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,660 14.4% 25,198 6.3% 31,247 5.9% 14,074 5.9% 20,287 6.5%
Office expenses /H1118/H1118/H1118/H1118/H1118/H111811,014 2.2% 17,855 4.5% 19,569 3.7% 8,982 3.8% 10,541 3.4%
Logistics expenses /H1118/H1118/H1118/H11188,338 1.7% 9,192 2.3% 10,925 2.1% 4,899 2.0% 6,748 2.2%
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,663 7.6% 30,428 7.7% 45,417 8.7% 17,596 7.3% 23,823 7.4%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118498,549 100.0% 397,553 100.0% 525,678 100.0% 239,438 100.0% 313,747 100.0%
as % of total r evenue /H1118/H1118 6.1% 6.9% 7.1% 6.6% 7.6%
Research and Development Expenses
Our research and development expenses primarily include (i) salaries, compensations and
benefits for personnel engaging in R&D function, (ii) depreciation and amortization for
properties and equipment related to research and development function, (iii) service fees for
professional services associated with R&D activities, and (iv) others, mainly include material
expenses, testing expenses, lease expenses and traveling expenses.
Y ear Ended December 31, Six Months Ended June 30,
2022 2023 2024 2024 2025
(in RMB thousands, except for percentages)
(Unaudited)
Salaries, compensations
and benefits /H1118/H1118/H1118/H1118/H1118/H1118609,480 65.1% 580,966 58.7% 742,591 66.2% 410,688 69.8% 418,616 73.7%
Depreciation and
amortization /H1118/H1118/H1118/H1118/H1118/H1118218,495 23.4% 287,943 29.1% 265,448 23.7% 134,382 22.8% 112,939 19.9%
Service fees /H1118/H1118/H1118/H1118/H1118/H1118/H111856,727 6.1% 43,310 4.4% 60,280 5.4% 19,723 3.4% 15,716 2.8%
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,882 5.4% 77,734 7.8% 54,070 4.7% 23,475 4.0% 20,409 3.6%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118935,584 100.0% 989,953 100.0% 1,122,389 100.0% 588,268 100.0% 567,680 100.0%
as % of total revenue /H1118/H1118 11.5% 17.2% 15.3% 16.3% 13.7%
FINANCIAL INFORMATION
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Impairment Loss on Goodwill
We recorded an impairment loss on goodwill of RMB241.5 million in 2022 and
RMB373.4 million in 2023, because Silead would not meet the original expected business
results attributable to the delay in the commercial production of certain customers’ products
based on assessments. See “— Selected Items of Consolidated Statements of Financial Position
— Goodwill.”
Income Tax
Our income tax expenses comprise current tax and deferred tax. See note 7 to “Appendix
I — Accountants’ Report.”
We are subject to income tax on an entity basis on profits arising in or derived from the
tax jurisdictions in which the members of us are domiciled and operate. Entities of the Group
established in the Chinese Mainland were subject to the PRC corporate income tax rate of 25%
during the Track Record Period. The provision for Hong Kong Profits Tax for the Track Record
Period was calculated at 16.5% of the estimated assessable profits for the year. During the
Track Record Period, a subsidiary of the Group incorporated in Hong Kong was under the
two-tiered profits tax rate regime, i.e. the first Hong Kong Dollars (“HK$”) 2,000,000 of
assessable profits were taxed at 8.25% and the remaining assessable profits were taxed at
16.5%. For tax rates in other jurisdictions in which we operate, please see note 7 to “Appendix
I — Accountants’ Report.”
We are subject to certain preferential tax rates. We and certain subsidiaries are regarded
as key enterprises in the industry. According to the announcement on preferential corporate
income tax policies for key enterprises, we and these subsidiaries were subject to a preferential
tax rate of 10% during the Track Record Period. We and these subsidiaries were also entitled
to an additional tax deductible allowance amounting to 120% of the qualified research and
development costs incurred for each of the years during the Track Record Period. Certain
subsidiaries of us obtained the certificates of “High and New Technology Enterprise”
(“HNTE”) from the tax authorities and were subject to a preferential tax rate of 15% during the
Track Record Period. These subsidiaries were also entitled to an additional tax deductible
allowance amounting to 75% or 100% of the qualified research and development costs incurred
for each of the years during the Track Record Period. See note 7 to “Appendix I —
Accountants’ Report.”
As of the Latest Practicable Date and during the Track Record Period, we had fulfilled all
our tax obligations and did not have any unresolved tax disputes.
FINANCIAL INFORMATION
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--- page 273 ---
PERIOD-TO-PERIOD COMPARISON OF RESULTS OF OPERATIONS
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Revenue
Six Months Ended June 30,
2024 2025 % Change
(in RMB thousands, except for percentages)
(Unaudited)
Specialty memory chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,604,520 2,844,934 9.2%
MCU /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118802,115 959,106 19.6%
Sensor chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118192,173 193,193 0.5%
Analog chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,098 152,276 4,815.3%
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,131 800 (88.8)%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,609,037 4,150,309 15.0%
Sales V olume and Average Selling Prices
Six Months Ended June 30,
2024 2025
Sales volume
Average
selling price Sales volume
Average
selling price
(Unit’000) (RMB) (Unit’000) (RMB)
Specialty memory chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,782,319 1.46 2,147,891 1.32
MCU /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118190,535 4.21 242,546 3.95
Sensor chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118107,633 1.79 119,979 1.61
Analog chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,784 0.09 958,420 0.16
Our revenue increased by 15.0% from RMB3,609.0 million for the six months ended June
30, 2024 to RMB4,150.3 million for the six months ended June 30, 2025, primarily due to (i)
a 9.2% increase in revenue from sales of specialty memory chips, (ii) a 19.6% increase in
revenue from sales of MCU, and (iii) a significant increase in revenue from sales of analog
chips.
Specialty memory chips
Our revenue from specialty memory chips increased by 9.2% from RMB2,604.5 million
in the six months ended June 30, 2024 to RMB2,844.9 million in the six months ended June
30, 2025, primarily due to a 20.5% increase in sales volume from 1,782.3 million units in the
six months ended June 30, 2024 to 2,147.9 million units in the six months ended June 30, 2025,
primarily due to (i) the gradual recovery of demands due to the further recovery of demands
FINANCIAL INFORMATION
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--- page 274 ---
for our NOR Flash in various downstream markets, especially the consumer electronics as
incentivized by the nation subsidies to the consumers, (ii) the continuous increase in storage
capacity required for NOR Flash for consumer electronics and AI-driven devices, and (iii) the
supply shortage in the niche DRAM market, driven by the accelerated inventory drawdown of
several leading industry players, resulting in increases in both the sales volume and selling
prices of our niche DRAM. Such increase was partially offset by a decrease in average selling
prices from RMB1.46 per unit in the six months ended June 30, 2024 to RMB1.32 per unit in
the six months ended June 30, 2025, primarily because we raised the selling prices of our NOR
Flash products in the second quarter of 2024 in response to increasing market demand, but
subsequently offered more competitive pricing by the end of 2024 to further expand our market
share, a strategy that continued throughout the six months ended June 30, 2025.
MCU
Our revenue from MCU increased by 19.6% from RMB802.1 million in the six months
ended June 30, 2024 to RMB959.1 million in the six months ended June 30, 2025, primarily
due to a 27.3% increase in sales volume from 190.5 million units in the six months ended June
30, 2024 to 242.5 million units in the six months ended June 30, 2025, primarily due to (i) the
further recovery of demand in various downstream markets mainly including network
communications and automobiles, as well as consumer electronics as incentivized by the nation
subsidies to consumers, and (ii) the launch of new products mainly for industrial applications
(such as industrial automation, energy storage and battery management) and consumer
electronics that further drove the sales of our MCU. Such increase was partially offset by a
6.2% decrease in average selling prices from RMB4.21 per unit in the six months ended June
30, 2024 to RMB3.95 per unit in the six months ended June 30, 2025 primarily due to the more
competitive prices we offered to further expand our market share amid intensified market
competition.
Sensor chips
Our revenue from sensor chips remained relative stable at RMB192.2 million and
RMB193.2 million in the six months ended June 30, 2024 and 2025, respectively.
Analog chips
Our revenue from analog chips increased significantly from RMB3.1 million in the six
months ended June 30, 2024 to RMB152.3 million in the six months ended June 30, 2025,
primarily due to (i) the increase in sales volume of our existing analog chips as well as the
analog chips of XySemi that was acquired by us by the end of 2024, the total sales volume of
which increased significantly from 34.8 million units in the six months ended June 30, 2024
to 958.4 million units in the six months ended June 30, 2025, and (ii) an increase in average
selling price from RMB0.09 per unit in the six months ended June 30, 2024 to RMB0.16 per
unit in the six months ended June 30, 2025, primarily due to a shift in product mix following
the acquisition of XySemi. The new portfolio included analog chips designed by XySemi used
in lithium-ion battery protection with higher average selling prices.
FINANCIAL INFORMATION
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Others
Our revenue from others decreased by 88.8% from RMB7.1 million in the six months
ended June 30, 2024 to RMB0.8 million in the six months ended June 30, 2025 primarily due
to less revenue from providing technical services during the same period in 2025, as part of
such revenue had not yet been recognized, which was dependent on the progress of service
delivery.
Cost of Sales
Six Months Ended June 30,
2024 2025 % Change
(in RMB thousands, except for percentages)
(Unaudited)
Cost of wafers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,615,473 1,851,752 14.6%
Cost of packaging and testing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118535,814 655,249 22.3%
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880,684 98,975 22.7%
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,231,971 2,605,976 16.8%
Write-down of inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111876,867 11,607 (84.9)%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,308,838 2,617,583 13.4%
Our cost of sales increased by 13.4% from RMB2,308.8 million for the six months ended
June 30, 2024 to RMB2,617.6 million for the six months ended June 30, 2025, primarily due
to a 14.6% increase in cost of wafers and a 22.3% increase in cost of packaging and testing,
primarily due to the increase in sales volume of our products. Our write-down of inventories
decrease by 84.9% from RMB76.9 million in the six months ended June 30, 2024 to RMB11.6
million in the six months ended June 30, 2025, primarily due to the gradual stabilization of the
prices of our products.
FINANCIAL INFORMATION
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--- page 276 ---
Gross Profit and Gross Profit Margin
Six Months Ended June 30,
2024 2025
Gross Profit
Gross Profit
Margin Gross Profit
Gross Profit
Margin
(in RMB thousands, except for percentages)
(Unaudited)
Specialty memory chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,022,009 39.2% 1,095,377 38.5%
MCU /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118309,217 38.6% 357,879 37.3%
Sensor chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,340 20.0% 30,941 16.0%
Analog chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118465 15.0% 59,361 39.0%
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,035 98.7% 775 96.9%
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,377,066 38.2% 1,544,333 37.2%
Write-down of inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118(76,867) (11,607)
Total/Overall /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,300,199 36.0% 1,532,726 36.9%
Our gross profit increased by 17.9% from RMB1,300.2 million for the six months ended
June 30, 2024 to RMB1,532.7 million for the six months ended June 30, 2025, primarily due
to a 15.0% increase in our total revenue and an increase in gross profit margin from 36.0% in
the six months ended June 30, 2024 to 36.9% in the six months ended June 30, 2025.
As a result of global supply shortages in 2021 and 2022, prices of IC products generally
reached their peak in recent years during that period. Although certain end markets began to
exhibit early signs of uneven recovery starting in 2024, overall market conditions have
remained challenging. See “Industry Overview — Overview of Global Semiconductor Industry
— Industry Cycle.” Throughout 2024, the average selling prices of our products continued to
decline, although at a slower rate compared to the decline observed from 2022 to 2023. As a
result, while our overall gross profit margin continued to improve on a year-over-year basis in
2024 and during the six months ended June 30, 2025, it was still lower than the peak in 2022.
Specialty memory chips
Our gross profits from specialty memory chips increased by 7.2% from RMB1,022.0
million for the six months ended June 30, 2024 to RMB1,095.4 million for the six months
ended June 30, 2025, primarily due to a 9.2% increase in revenue from sales of specialty
memory chips during the same periods. The gross profit margin of our specialty memory chips
remained relatively stable at 39.2% and 38.5% in the six months ended June 30, 2024 and 2025,
respectively.
FINANCIAL INFORMATION
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--- page 277 ---
MCU
Our gross profits from MCU increased by 15.7% from RMB309.2 million for the six
months ended June 30, 2024 to RMB357.9 million for the six months ended June 30, 2025,
primarily due to a 19.6% increase in revenue from sales of MCU during the same periods. The
gross profit from our MCU remained relatively stable at 38.6% and 37.3% in the six months
ended June 30, 2024 and 2025, respectively.
Sensor chips
Our gross profit from sensor chips decreased by 19.3% from RMB38.3 million for the six
months ended June 30, 2024 to RMB30.9 million for the six months ended June 30, 2025,
primarily due to the gross profit margin of our sensor chips decreased from 20.0% in the six
months ended June 30, 2024 to 16.0% in the six months ended June 30, 2025. Such decrease
in gross profit margin was primarily due to the decrease in selling price as a result of the
intense competition.
Analog chips
Our gross profit from analog chips increased significantly from RMB0.5 million for the
six months ended June 30, 2024 to RMB59.4 million for the six months ended June 30, 2025,
primarily due to (i) a significant increase in revenue from sales of analog chips during the same
periods, and (ii) an increase in gross profit margin from 15.0% in the six months ended June
30, 2024 to 39.0% in the six months ended June 30, 2025. Such increase in gross profit margin
was primarily due to a shift in product mix following the acquisition of XySemi. The new
portfolio included analog chips designed by XySemi used in lithium-ion battery protection with
higher average selling prices.
Others
The gross profit from others decreased by 89.0% from RMB7.0 million for the six months
ended June 30, 2024 to RMB0.8 million for the six months ended June 30, 2025, primarily due
to a 88.8% decrease in revenue from others. The gross profit margin from others remained
relative stable at 98.7% for the six months ended June 30, 2024 and 96.9% for the six months
ended June 30, 2025.
Other Income
Other income decreased by 16.8% from RMB240.1 million for the six months ended June
30, 2024 to RMB199.7 million for the six months ended June 30, 2025, primarily due to (i) a
decrease in net gain from financial assets and liabilities measured at FVPL of RMB10.5 million
primarily attributable to the decrease in wealth management products held by us, and (ii) a
decrease in net gain on foreign exchange differences of RMB34.5 million as a result of the
fluctuation in exchange rates from USD to RMB.
FINANCIAL INFORMATION
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--- page 278 ---
Selling and Distribution Expenses
Six Months Ended June 30,
2024 2025 % Change
(in RMB thousands, except for percentages)
(Unaudited)
Selling and distribution expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118170,496 224,353 31.6%
as % of total revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.7% 5.4%
Our selling and distribution expenses increased by 31.6% from RMB170.5 million for the
six months ended June 30, 2024 to RMB224.4 million for the six months ended June 30, 2025,
primarily due to (i) an increase in salaries, compensations and benefits of RMB37.3 million
primarily attributable to an increase in number and averages salaries of our selling and
distribution personnel, and (ii) an increase in professional service fees of RMB6.7 million. As
such, as a percentage of our total revenue, our selling and distribution expenses increased from
4.7% for the six months ended June 30, 2024 to 5.4% for the six months ended June 30, 2025.
Administrative Expenses
Six Months Ended June 30,
2024 2025 % Change
(in RMB thousands, except for percentages)
(Unaudited)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118239,438 313,747 31.0%
as % of total revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186.6% 7.6%
Our administrative expenses increased by 31.0% from RMB239.4 million for the six
months ended June 30, 2024 to RMB313.7 million for the six months ended June 30, 2025,
primarily due to (i) an increase in salaries, compensations and benefits of RMB47.9 million
primarily attributable to an increase in number and average salaries of our administrative
personnel, and (ii) an increase in depreciation and amortization of RMB10.0 million primarily
attributable to our continuous investment in property, plant and equipment and software for
management purposes. As such, as a percentage of our total revenue, our administrative
expenses increased from 6.6% for the six months ended June 30, 2024 to 7.6% for the six
months ended June 30, 2025.
FINANCIAL INFORMATION
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--- page 279 ---
Research and Development Expenses
Six Months Ended June 30,
2024 2025 % Change
(in RMB thousands, except for percentages)
(Unaudited)
Research and development expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118588,268 567,680 (3.5)%
as % of total revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816.3% 13.7%
Our research and development expenses decreased by 3.5% from RMB588.3 million for
the six months ended June 30, 2024 to RMB567.7 million for the six months ended June 30,
2025, primarily due to a decrease in depreciation and amortization of RMB21.4 million. Due
to afore-mentioned reason as well as the economics of scale in line with our business growth,
as a percentage of our total revenue, our research and development expenses decreased from
16.3% for the six months ended June 30, 2024 to 13.7% for the six months ended June 30,
2025.
Income Tax
Our income tax expenses decreased by 24.2% from RMB10.9 million for the six months
ended June 30, 2024 to RMB8.2 million for the six months ended June 30, 2025, primarily due
to an increase in allowable tax deductions resulted from the losses of subsidiaries.
Profit for the Period
As a result of the foregoing, our profit for the period increased from RMB517.0 million
for the six months ended June 30, 2024 to RMB587.8 million for the six months ended June
30, 2025.
Y ear Ended December 31, 2024 Compared to Y ear Ended December 31, 2023
Revenue
Y ear Ended December 31,
2023 2024 % Change
(in RMB thousands, except for percentages)
Specialty memory chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,077,311 5,194,173 27.4%
MCU /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,312,209 1,690,547 28.8%
Sensor chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118352,449 448,300 27.2%
Analog chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,604 15,468 236.0%
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,250 7,490 (47.4)%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,760,823 7,355,978 27.7%
FINANCIAL INFORMATION
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--- page 280 ---
Sales V olume and Average Selling Prices
Y ear Ended December 31,
2023 2024
Sales volume
Average
selling price Sales volume
Average
selling price
(Unit’000) (RMB) (Unit’000) (RMB)
Specialty memory chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,655,166 1.54 3,553,167 1.46
MCU /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118276,089 4.75 409,251 4.13
Sensor chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118178,811 1.97 267,983 1.67
Analog chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,625 0.40 131,183 0.12
Our revenue increased by 27.7% from RMB5,760.8 million in 2023 to RMB7,356.0
million in 2024, primarily due to (i) a 27.4% increase in revenue from sales of specialty
memory chips, and (ii) a 28.8% increase in revenue from sales of MCU.
In particular, we experienced an across-the-board increase in sales volume for all our
product categories, primarily due to (i) the gradual recovery of demands due to development
in various downstream markets such as consumer electronics and network application (for
Flash, niche DRAM, MCU, analog chips and sensor chips), automobiles (for Flash and MCU)
and industrial applications (for MCU), and (ii) our customers’ recognition of our products due
to its quality and competitiveness.
On the other hand, intense competition generally resulted in lower average selling prices
of our products. From 2023, the overall semiconductor industry was at a downturn phase,
featured by weakened consumer demand and falling price across different products. Such
downturn was primarily driven by destocking by downstream participants, following the
inventory buildup in 2021 and 2022 caused by supply shortage then. In particular, several
leading industry players of DRAM started to drawdown their inventory of certain types of their
niche DRAM that reached their ends of product lives, which resulted in a decrease in the
market prices of niche DRAM in the second half of 2024. A change of our analog chip product
mix also negatively affected the average selling prices of our analog chips. However, the
gradual recovery of market demand resulted in a slower rate of overall average selling prices
decrease in 2024 as compared in 2023.
Our revenue from others decreased from RMB14.3 million in 2023 to RMB7.5 million in
2024, primarily due to the decrease in technical services demanded by our customers.
FINANCIAL INFORMATION
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--- page 281 ---
Cost of Sales
Y ear Ended December 31,
2023 2024 % Change
(in RMB thousands, except for percentages)
Cost of wafers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,872,854 3,262,675 13.6%
Cost of packaging and testing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118765,521 1,107,100 44.6%
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118139,433 190,850 36.9%
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,777,808 4,560,625 20.7%
Write-down of inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118236,707 172,135 (27.3)%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,014,515 4,732,760 17.9%
Our cost of sales increased by 17.9% from RMB4,014.5 million in 2023 to RMB4,732.8
million in 2024, primarily due to the increase in our sales volume from 2023 to 2024. The
27.3% decrease in write-down of inventories from 2023 to 2024 reflected the stabilization of
the prices of our products.
Gross Profit and Gross Profit Margin
Y ear Ended December 31,
2023 2024
Gross Profit
Gross Profit
Margin Gross Profit
Gross Profit
Margin
(in RMB thousands, except for percentages)
Specialty memory chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,344,959 33.0% 2,091,500 40.3%
MCU /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118569,404 43.4% 621,085 36.7%
Sensor chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,382 16.0% 73,797 16.5%
Analog chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,923) (41.8)% 1,628 10.5%
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,193 99.6% 7,343 98.0%
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,983,015 34.4% 2,795,353 38.0%
Write-down of inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118(236,707) (172,135)
Total/Overall /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,746,308 30.3% 2,623,218 35.7%
Our gross profit increased by 50.2% from RMB1,746.3 million in 2023 to RMB2,623.2
million in 2024, primarily due to a 27.7% increase in our total revenue and an increase in gross
profit margin from 30.3% in 2023 to 35.7% in 2024.
FINANCIAL INFORMATION
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--- page 282 ---
Specialty memory chips
Our gross profits from specialty memory chips increased by 55.5% from RMB1,345.0
million in 2023 to RMB2,091.5 million in 2024, primarily due to (i) a 27.4% increase in
revenue from sales of specialty memory chips from 2023 to 2024, and (ii) an increase in gross
profit margin from 33.0% in 2023 to 40.3% in 2024. The increase in the gross profit margin
of our specialty memory products was primarily due to (i) a higher proportion of sales from our
high-margin NOR Flash products, and (ii) the fact that the selling prices of our specialty
memory chips stabilized, which was in line with the industry cycle and our continuous efforts
in cost control, which resulted in a lower cost per unit.
MCU
Our gross profits from MCU increased by 9.1% from RMB569.4 million in 2023 to
RMB621.1 million in 2024, primarily due to a 28.8% increase in revenue from sales of MCU,
which was partially offset by a decrease in gross profit margin from 43.4% in 2023 to 36.7%
in 2024. The decrease in gross profit margin was primarily due to intense competition.
Sensor chips
Our gross profit from sensor chips increased by 30.9% from RMB56.4 million in 2023 to
RMB73.8 million in 2024, primarily due to a 27.2% increase in revenue from sales of sensor
chips. Gross profit margin from sensor chips remained relatively stable at 16.0% in 2023 and
16.5% in 2024.
Analog chips
In 2024, we managed to turn gross losses of RMB1.9 million for analog chips in 2023 into
gross profits of RMB1.6 million for analog chips, primarily due to the decrease in the costs of
our analog chips as a result of a decrease in per unit cost as affected by the industry cycle and
our continuous efforts in cost control, which outpaced the decrease in the average selling price
of our products.
Others
The gross profit from others decreased from RMB14.2 million in 2023 to RMB7.3 million
in 2024, primarily due to a 47.4% decrease in revenue from others. The gross profit margin
from others remained relative stable at 99.6% in 2023 and 98.0% in 2024.
FINANCIAL INFORMATION
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--- page 283 ---
Other Income
Other income increased by 29.6% from RMB424.4 million in 2023 to RMB549.9 million
in 2024, primarily due to (i) a RMB95.8 million increase in interest income in 2024 primarily
due to the increase in our deposits with banks, and (ii) a RMB101.5 million increase in gains
from foreign exchange difference mainly as a result of fluctuations in exchange rate from USD
to RMB.
Selling and Distribution Expenses
Y ear Ended December 31,
2023 2024 % Change
(in RMB thousands, except for percentages)
Selling and distribution expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118270,498 370,907 37.1%
as % of total revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.7% 5.0%
Our selling and distribution expenses increased by 37.1% from RMB270.5 million in
2023 to RMB370.9 million in 2024, primarily due to an increase in salaries, compensations and
benefits of RMB91.1 million, primarily attributable to an increase in bonus and share-based
payments for our sales personnel which were associated with the results of performance. As
such, as a percentage of our total revenue, our selling and distribution expenses increased from
4.7% in 2023 to 5.0% in 2024.
Administrative Expenses
Y ear Ended December 31,
2023 2024 % Change
(in RMB thousands, except for percentages)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118397,553 525,678 32.2%
as % of total revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186.9% 7.1%
Our administrative expenses increased by 32.2% from RMB397.6 million in 2023 to
RMB525.7 million in 2024, primarily due to an increase in salaries, compensations and
benefits of RMB113.3 million, primarily attributable to an increase in bonus and share-based
payments for our administrative personnel which were associated with the results of
performance. As such, as a percentage of our total revenue, our administrative expenses
increased from 6.9% in 2023 to 7.1% in 2024.
FINANCIAL INFORMATION
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--- page 284 ---
Research and Development Expenses
Y ear Ended December 31,
2023 2024 % Change
(in RMB thousands, except for percentages)
Research and development expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118989,953 1,122,389 13.4%
as % of total revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817.2% 15.3%
Our research and development expenses increased by 13.4% from RMB990.0 million in
2023 to RMB1,122.4 million in 2024, primarily due to an increase in salaries, compensations
and benefits of RMB161.6 million, primarily attributable to an increase in number of our R&D
personnel and an increase in bonus for our R&D personnel as incentives. As a percentage of
our total revenue, our research and development expenses decreased from 17.2% in 2023 to
15.3% in 2024 despite an increase in absolute amounts, primarily due to a rapid increase in
revenue as a result of the recovery of downstream demand for our products in 2024.
Income Tax
We recorded income tax expenses of RMB22.8 million in 2024, as compared to the
income tax credit of RMB36.4 million in 2023, primarily due to the decrease in profit before
tax in 2023.
Profit for the Y ear
As a result of the foregoing, our profit for the year increased significantly from
RMB161.1 million in 2023 to RMB1,100.9 million in 2024.
Y ear Ended December 31, 2023 Compared to Y ear Ended December 31, 2022
Revenue
Y ear Ended December 31,
2022 2023 % Change
(in RMB thousands, except for percentages)
Specialty memory chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,825,856 4,077,311 (15.5)%
MCU /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,825,357 1,312,209 (53.6)%
Sensor chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118434,974 352,449 (19.0)%
Analog chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,851 4,604 19.6%
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,954 14,250 (64.3)%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,129,992 5,760,823 (29.1)%
FINANCIAL INFORMATION
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--- page 285 ---
Sales V olume and Average Selling Prices
Y ear Ended December 31,
2022 2023
Sales volume
Average
selling price Sales volume
Average
selling price
(Unit’000) (RMB) (Unit’000) (RMB)
Specialty memory chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,259,645 2.14 2,655,166 1.54
MCU /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118343,535 8.22 276,089 4.75
Sensor chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118157,130 2.77 178,811 1.97
Analog chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,796 1.38 11,625 0.40
Our revenue decreased by 29.1% from RMB8,130.0 million in 2022 to RMB5,760.8
million in 2023 primarily due to the downturn and intensified market competition that led to
decreases in selling prices of our specialty memory chips, MCU and sensor chips, which in turn
resulted in a decreased revenue of those products. Such downturn was primarily driven by
destocking by downstream participants, following the inventory buildup in 2021 and 2022
caused by supply shortage then. The downstream restocking intensified the market competition
and, in turn, resulted in a notable decrease in the selling prices of IC products in 2023. Such
decrease in average selling prices of our products was generally in line with the overall
industry trend. See “Industry Overview — Industry Cycle,” and “— Significant Factors
Affecting Our Results of Operations — Industry Cycle.”
Specialty memory chips
Our revenue from specialty memory chips decreased by 15.5% from RMB4,825.9 million
in 2022 to RMB4,077.3 million in 2023, primarily due to a 28.0% decrease in average selling
price from RMB2.14 per unit in 2022 to RMB1.54 per unit in 2023 primarily attributable to
downturn resulted from the destocking by downstream participants following the inventory
buildup in 2021 and 2022. The decrease in average selling price was partially offset by a 17.5%
increase in sales volume of our specialty memory chips from 2,259.6 million units in 2022 to
2,655.2 million units in 2023 primarily due to the increase in sales of Flash in network
application.
MCU
Our revenue from MCU decreased by 53.6% from RMB2,825.4 million in 2022 to
RMB1,312.2 million in 2023, primarily due to (i) a 19.6% decrease in sales volume from 343.5
million units in 2022 to 276.1 million units in 2023, and (ii) a 42.2% decrease in average
selling price from RMB8.22 per unit in 2022 to RMB4.75 per unit in 2023. Such decreases
were primarily attributable to downturn resulted from the destocking by downstream
participants following the inventory buildup in 2021 and 2022, as well as a decrease in
proportion in sales of high-performance and mainstream products due to the decrease in
FINANCIAL INFORMATION
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--- page 286 ---
demand in industrial applications (such as industrial automation, energy storage and battery
management), which had a relatively higher selling price. See “— Significant Factors Affecting
Our Results of Operations — Industry Cycle.”
Sensor chips
Our revenue from sensor chips decreased by 19.0% from RMB435.0 million in 2022 to
RMB352.4 million in 2023, primarily due to a 28.9% decrease in average selling price from
RMB2.77 per unit to RMB1.97 per unit. The decrease in selling price was primarily
attributable to the downturn result from the destocking by downstream participants following
the inventory buildup in 2021 and 2022. However, such decrease in selling price was partially
offset by a 13.8% increase in sales volume of our sensor chips, as a result of our continuous
efforts in promoting of our products to increase the market share.
Analog chips
Our revenue from analog chips increased by 19.6% from RMB3.9 million in 2022 to
RMB4.6 million in 2023, primarily due to a significant increase in sales volume from 2.8
million units in 2022 to 11.6 million units in 2023 as a result of the growing market recognition
of the quality and performance of our analog chips and an increase in the market share of our
analog chips. Such increase in sales volume was partially offset by a rapid decrease in the
average selling price of our analog chips from RMB1.38 per unit in 2022 to RMB0.40 per unit
in 2023 primarily due to downturns resulted from the destocking by downstream participants
following the inventory buildup in 2021 and 2022 as well as the change in product mix.
Others
Our revenue from others decreased from RMB40.0 million in 2022 to RMB14.3 million
in 2023, primarily due to (i) a decrease in technical services demanded by our customers, and
(ii) the fact that our customers accepted and adopted more of our existing techniques in 2023
that were typically priced lower as compared with the customized technical services.
Cost of Sales
Y ear Ended December 31,
2022 2023 % Change
(in RMB thousands, except for percentages)
Cost of wafers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,281,654 2,872,854 (12.5)%
Cost of packaging and testing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118853,427 765,521 (10.3)%
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118120,275 139,433 15.9%
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,255,356 3,777,808 (11.2)%
Write-down of inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118177,420 236,707 33.4%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,432,776 4,014,515 (9.4)%
FINANCIAL INFORMATION
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Our cost of sales decreased by 9.4% from RMB4,432.8 million in 2022 to RMB4,014.5
million in 2023, primarily due to a 12.5% decrease in cost of wafers and a 10.3% decrease in
cost of packaging and testing, primarily due to a decrease in unit costs of our products as a
result of the downturn in the semiconductor industry. Moreover, there was a 33.4% increase in
write-down of inventories from 2022 to 2023 that reflected the decrease in selling prices of our
products.
Gross Profit and Gross Profit Margin
Y ear Ended December 31,
2022 2023
Gross Profit
Gross Profit
Margin Gross Profit
Gross Profit
Margin
(in RMB thousands, except for percentages)
Specialty memory chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,934,749 40.1% 1,344,959 33.0%
MCU /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,833,903 64.9% 569,404 43.4%
Sensor chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,168 16.4% 56,382 16.0%
Analog chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118959 24.9% (1,923) (41.8)%
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,857 84.7% 14,193 99.6%
Subtotal/Overall /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,874,636 47.7% 1,983,015 34.4%
Write-down of inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118(177,420) (236,707)
Total/Overall /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,697,216 45.5% 1,746,308 30.3%
Our gross profit decreased by 52.8% from RMB3,697.2 million in 2022 to RMB1,746.3
million in 2023, primarily due to (i) a 29.1% decrease in our total revenue and (ii) a decrease
in our gross margin from 45.5% in 2022 to 30.3% in 2023, primarily attributable to a decrease
in selling prices of our products, while the cost of sales did not decrease at the same rate. More
specifically, the sustained increase in selling prices of IC products during 2021 and 2022 also
led to a corresponding rise in cost of wafer, packaging and testing. As affected by the decrease
in selling prices since 2023, the cost of sales also decreased. However, there is typically a time
lag before changes in those costs are fully reflected in our cost of sales, due to factors such as
existing inventory, long-term supply agreements and production lead times. As a result, while
the selling prices of IC products declined significantly in 2023, our cost of sales, especially for
specialty memory chips and MCU, did not decrease at the same rate in 2023. According to the
Frost & Sullivan, such decrease in gross profit margin was generally in line with the industry
trend from 2022 to 2023.
Specialty memory chips
Our gross profits from specialty memory chips decreased by 30.5% from RMB1,934.7
million in 2022 to RMB1,345.0 million in 2023, primarily due to (i) a 15.5% decrease in
revenue from sales of specialty memory chips, and (ii) a decrease in gross profit margin from
40.1% in 2022 to 33.0% in 2023, which in turn was primarily due to a steeper decrease in
FINANCIAL INFORMATION
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selling price due to a downturn caused by the destocking by downstream participants following
the inventory buildup in 2021 and 2022, as compared with the decrease in per unit cost of
wafers as there was a time lag in cost reduction to be passed from the upstream to us.
MCU
Our gross profits from MCU decreased by 69.0% from RMB1,833.9 million in 2022 to
RMB569.4 million in 2023, primarily due to (i) a 53.6% decrease in revenue from sales of
MCU, and (ii) a decrease in gross profit margin from 64.9% in 2022 to 43.4% in 2023, which
in turn was primarily due to a steeper decrease in selling price due to a downturn caused by
the destocking by downstream participants following the inventory buildup in 2021 and 2022,
as compared with the decrease in per unit cost of wafers as there was a time lag in cost
reduction to be passed from the upstream to us.
Sensor chips
Our gross profit from sensor chips decreased by 20.8% from RMB71.2 million in 2022
to RMB56.4 million in 2023, primarily due to a 19.0% decrease in revenue from sales of sensor
chips. The gross profit margin of our sensor chips remained relatively stable at 16.4% in 2022
and 16.0% in 2023.
Analog chips
In 2023, we recorded gross loss for our analog chips of RMB1.9 million, as compared to
the gross profit of RMB1.0 million in 2022, primarily due to a steeper decrease in selling price
due to a downturn caused by the destocking by downstream participants following the
inventory buildup in 2021 and 2022 and our competitive pricing policy of analog chips for
expanding our market share, as compared with the decrease in per unit cost of wafers as there
was a time lag in cost reduction.
Others
The gross profit from others decreased by 58.1% from RMB33.9 million in 2022 to
RMB14.2 million in 2023, primarily due to a 64.3% decrease in revenue from others, which
was partially offset by an increase in gross profit margin from 84.7% in 2022 to 99.6%. Such
increase in gross profit margin was primarily due to the fact that our customers accepted and
adopted more of our existing techniques in 2023 that were of higher gross profit margin for less
relevant costs.
FINANCIAL INFORMATION
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Other Income
Other income decreased by 18.3% from RMB519.3 million in 2022 to RMB424.4 million
in 2023, primarily due to a decrease in gain from foreign exchange differences of RMB165.8
million primarily attributable to fluctuation in exchange rate between USD to RMB, which was
partially offset by an increase in interest income of RMB81.2 million as a result of an increase
in deposits with banks.
Selling and Distribution Expenses
Y ear Ended December 31,
2022 2023 % Change
(in RMB thousands, except for percentages)
Selling and distribution expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118265,878 270,498 1.7%
as % of total revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.3% 4.7%
Our selling and distribution expenses remained relatively stable at RMB265.9 million in
2022 and RMB270.5 million in 2023 as we maintained our sales and marketing efforts in
response to the increasing market competition. As a percentage of our total revenue, our selling
and distribution expenses increased from 3.3% in 2022 to 4.7% in 2023.
Administrative Expenses
Y ear Ended December 31,
2022 2023 % Change
(in RMB thousands, except for percentages)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118498,549 397,553 (20.3)%
as % of total revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186.1% 6.9%
Our administrative expenses decreased by 20.3% from RMB498.5 million in 2022 to
RMB397.6 million in 2023, primarily due to (i) a decrease in salaries, compensations and
benefits of RMB77.1 million, primarily attributable to a decrease in bonus and share-based
payments which were associated with our results of operations, (ii) a decrease in taxes and
addition charges of RMB46.5 million, primarily due to the decrease in revenue in 2023, which
was partially offset by an increase in depreciation and amortization of RMB19.5 million
primarily attributable to our continuous investment in fixed assets and software for
management purposes.
FINANCIAL INFORMATION
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Research and Development Expenses
Y ear Ended December 31,
2022 2023 % Change
(in RMB thousands, except for percentages)
Research and development expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118935,584 989,953 5.8%
as % of total revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811.5% 17.2%
Our research and development expenses increased from RMB935.6 million in 2022 to
RMB990.0 million in 2023, primarily due to an increase in depreciation and amortization of
RMB69.4 million primarily attributable to an increase in equipment for R&D activities. Such
increase was partially offset by a decrease in salaries, compensations and benefits of RMB28.5
million, primarily attributable to a decrease in bonus and share-based payments which were
associated with our results of operations. Our research and development expenses as a
percentage of our total revenue increased from 11.5% in 2022 to 17.2% in 2023, primarily due
to a decrease in revenue in 2023.
Income Tax
We recorded an income tax credit of RMB36.4 million in 2023, as compared to the
income tax expenses of RMB209.5 million in 2022, primarily due to a decrease in profit before
tax in 2023 which resulted in a decrease in current tax for 2023, and the loss recorded by
certain subsidiaries of us which resulted in an increase in deferred tax for 2023.
Profit for the Y ear
As a result of the foregoing, our profit for the year decreased significantly from
RMB2,052.9 million in 2022 to RMB161.1 million in 2023.
LIQUIDITY AND CAPITAL RESOURCES
During the Track Record Period, we financed our operations primarily through cash
generated from our operating activities. As of June 30 and October 31, 2025, we had cash and
cash equivalents of RMB7,863.1 million and RMB9,385.2 million, respectively.
Going forward, we believe our liquidity requirements will be satisfied by using funds
from a combination of cash generated from our operating activities and net proceeds from the
Global Offering.
Taking into account the cash and cash equivalents, the net proceeds from the Global
Offering and cash generated from our operating activities available to us, our Directors believe
that we have sufficient working capital to meet our present and future cash requirements for
at least the next 12 months from the date of publication of this prospectus.
FINANCIAL INFORMATION
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Net Current Assets/Liabilities
The table below sets forth our current assets and liabilities as of the dates indicated.
As of December 31,
As of
June 30,
As of
October 31,
2022 2023 2024 2025 2025
(in RMB thousands)
(unaudited)
Current assets:
Financial assets measured
at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,857,548 1,805,558 120,000 62,503 60,990
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,153,876 1,990,866 2,346,368 2,400,649 2,785,764
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118173,930 127,280 231,791 244,862 230,446
Prepayments and other current assets /H1118 320,097 386,020 608,614 942,445 758,917
Prepaid income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,342 27,371 14 940 21,422
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 1,347,250 323,009
Cash at bank and on hand /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,874,850 7,265,862 9,128,010 7,863,121 9,385,159
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,414,643 11,602,957 12,434,797 12,861,770 13,565,707
Current liabilities:
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118479,266 501,844 733,599 718,997 866,780
Accruals and other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118598,626 351,661 522,731 593,524 469,973
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111882,917 88,091 94,532 135,224 238,966
Financial liabilities measured at FVPL – – – 4,662 875
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 898,221 619,575 380,187
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,433 41,876 53,113 62,246 59,605
Income tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,422 2,703 28,311 21,402 38,647
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,196,664 986,175 2,330,507 2,155,630 2,055,033
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,217,979 10,616,782 10,104,290 10,706,140 11,510,674
Comparison between October 31, 2025 and June 30, 2025
Our net current assets increased from RMB10,706.1 million as of June 30, 2025 to
RMB11,510.7 million as of October 31, 2025, primarily due to (i) an increase in current assets,
mainly including an increase in cash at bank and on hand of RMB1,522.0 million, and an
increase in inventories of RMB385.1 million, partially offset by a decrease in time deposits of
RMB1,024.2 million, and (ii) a decrease in current liabilities, mainly including a decrease in
bank loans of RMB239.4 million, and a decrease in accruals and other payables of RMB123.6
million, partially offset by an increase in trade payables of RMB147.8 million and an increase
in contract liabilities of RMB103.7 million.
FINANCIAL INFORMATION
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Comparison between June 30, 2025 and December 31, 2024
Our net current assets increased from RMB10,104.3 million as of December 31, 2024 to
RMB10,706.1 million as of June 30, 2025, primarily due to (i) an increase in current assets,
mainly including an increase in time deposits of RMB1,347.0 million, and an increase in
prepayments and other current assets of RMB333.8 million, partially offset by a decrease in
cash at bank and on hand of RMB1,264.9 million, and (ii) a decrease in current liabilities,
mainly including a decrease in bank loans of RMB278.6 million. See “— Selected Items of
Consolidated Statements of Financial Position” for further details.
Comparison between December 31, 2024 and December 31, 2023
Our net current assets decreased from RMB10,616.8 million as of December 31, 2023 to
RMB10,104.3 million as of December 31, 2024, primarily due to an increase in current
liabilities, mainly including (i) an increase in trade payables of RMB231.8 million, (ii) an
increase in accruals and other payables of RMB171.1 million, and (iii) an increase of bank
loans of RMB898.2 million. Such increase in current liabilities was partially offset by an
increase in current assets, mainly including (i) an increase in inventories of RMB355.5 million,
and (ii) an increase in cash at bank and on hand of RMB1,862.1 million, that was partially
offset by a decrease in financial assets measured at FVPL of RMB1,685.6 million. See “—
Selected Items of Consolidated Statements of Financial Position” for further details.
Comparison between December 31, 2023 and December 31, 2022
Our net current assets increased from RMB10,218.0 million as of December 31, 2022 to
RMB10,616.8 million as of December 31, 2023, primarily due to (i) an increase in current
assets, mainly including an increase in cash at bank and on hand of RMB391.0 million,
partially offset by a decrease in inventories of RMB163.0 million, and (ii) a decrease in current
liabilities, mainly include a decrease in accruals and other payables of RMB247.0 million. See
“— Selected Items of Consolidated Statements of Financial Position” for further details.
FINANCIAL INFORMATION
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SELECTED ITEMS OF CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Inventories
Our inventories include raw materials, work in progress, finished goods and others. Our
raw materials mainly consist of the wafers supplied by our foundry partners, and our
work-in-progress inventory mainly comprises the unfinished chips undergoing packaging and
testing processing at our OSA T partners. The table below sets forth the breakdown of our
inventories as of the dates indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(in RMB thousands)
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,192,425 1,339,048 1,134,950 1,057,724
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118261,161 289,985 426,950 645,774
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118928,945 706,050 1,156,432 980,717
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 859 3,823
Less: write-down of inventories /H1118/H1118/H1118(228,655) (344,217) (372,823) (287,389)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,153,876 1,990,866 2,346,368 2,400,649
Note:
(1) Mainly including contract fulfillment cost.
Our inventories decreased from RMB2,153.9 million as of December 31, 2022 to
RMB1,990.9 million as of December 31, 2023, primarily due to an increase in the provision
for write-down of inventories primarily due to the industry downturns caused by the destocking
by downstream participants following the inventory buildup in 2021 and 2022 that led to a
weakened market demand. Our inventories increased from RMB1,990.9 million as of
December 31, 2023 to RMB2,346.4 million as of December 31, 2024, due to (i) an increase in
inventory level in response to the gradual recovery in market demands in 2024, and (ii) the
newly additions of inventories through acquisition of XySemi. However, the increase in
inventory balance as of December 31, 2024 was not commensurate with the increase in revenue
in 2024, primarily due to the buildup of inventories to a certain extent as affected by the
industry cycle. Our inventories increased from RMB2,346.4 million as of December 31, 2024
to RMB2,400.6 million as of June 30, 2025, due to the increase in inventory level in response
to the further recovery of the markets.
As of December 31, 2022, 2023 and 2024 and June 30, 2025, we recognized write-down
of inventories of RMB228.7 million, RMB344.2 million, RMB372.8 million and RMB287.4
million, primarily due to the decrease in market price of our products as a result of the
FINANCIAL INFORMATION
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destocking by downstream participants following the inventory buildup in 2021 and 2022.
Based on the our prudent estimation and judgment, and in accordance with the our accounting
policies, we believe that we have made sufficient write-down of inventories.
Turnover Days
The table below sets forth the turnover days of our inventories for the years/period
indicated.
Y ear Ended December 31,
Six Months
Ended
June 30,
2022 2023 2024 2025
Inventory turnover days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118148 188 167 163
Note:
(1) Inventory turnover days for each year/period equals the average of the beginning and ending balances of
inventory for that period divided by cost of sales for that year/period and multiplied by 365 days for the year
ended December 31, and 180 days for the six months ended June 30.
Our inventory turnover days increased from 148 days in 2022 to 188 days in 2023,
primarily due to the industry downturns caused by oversupply that led to a weakened market
demand, which in turn resulted in a slower turnover of our inventories in 2023. Our inventory
turnover days decreased to 167 days in 2024 and 163 days in the six months ended June 30,
2025, primarily due to (i) the gradual recovery in market demands in 2024, and (ii) our active
measures, including optimizing the procurement time and enhanced product promotion
activities, to accelerate our inventory turnover.
Aging Analysis
The table below sets forth an aging analysis of our inventories as of the dates indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(in RMB thousands)
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,103,493 1,828,898 2,284,906 2,338,383
One to two years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,383 161,968 61,462 62,266
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,153,876 1,990,866 2,346,368 2,400,649
FINANCIAL INFORMATION
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Subsequent utilization
As of October 31, 2025, 84.7% of our total inventories as of June 30, 2025, or
RMB2,033.9 million, were utilized or sold.
Trade and Bills Receivables
Our trade and bill receivables mainly arise from the provision of credit terms to our
customers. We typically require our distributors to make prepayments for the products. We may
provide certain distributors or direct sales customers credit terms ranging from seven days to
120 days according to our customer credit management policy, depending on their operating
situations, financial condition and expected transaction volume.
The table below sets forth the breakdown of our trade and bills receivables as of the dates
indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(in RMB thousands)
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118142,625 114,147 212,601 227,305
Bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,809 13,133 19,775 17,557
Less: credit loss allowance /H1118/H1118/H1118/H1118/H1118/H1118(504) – (585) –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118173,930 127,280 231,791 244,862
Our trade and bills receivables decreased from RMB173.9 million as of December 31,
2022 to RMB127.3 million as of December 31, 2023, primarily due to (i) the collection of trade
and bills receivables upon maturity, (ii) a decrease in sales as a result of industry downturn
caused by the destocking by downstream participants following the inventory buildup in 2021
and 2022 that led to a weakened market demand. Our trade and bills receivables increased from
RMB127.3 million as of December 31, 2023 to RMB231.8 million as of December 31, 2024
and further to RMB244.9 million as of June 30, 2025, primarily due to an increase in the sales
of our products in 2024 as a result of the gradually recovered downstream demand and our
continuous efforts in marketing and enriching our product offerings.
FINANCIAL INFORMATION
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Aging Analysis and Impairment
The table below sets forth an aging analysis of our trade receivables as of the dates
indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(in RMB thousands)
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134,502 114,147 211,221 227,305
More than 3 months but less
than 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,619 – 795 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118142,121 114,147 212,016 227,305
Further details on the Group’s credit policy and credit risk arising from trade receivables,
see note 32(a) to “Appendix I — Accountants’ Report.”
Turnover Days
The table below sets forth the turnover days of our trade and bills receivables for the
years/period indicated.
Y ear Ended December 31,
Six Months
Ended
June 30,
2022 2023 2024 2025
Trade and bills receivables
turnover days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 10 9 10
Note:
(1) Trade and bill receivables turnover days for each year/period equals the average of the beginning and ending
balances of trade and bills receivables for that year/period divided by revenue for that period and multiplied
by 365 days for the year ended December 31, and 180 days for the six months ended June 30.
FINANCIAL INFORMATION
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As a result of our continuous efforts in collecting our trade and bills receivables, our
turnover days for trade and bills receivables were 12 days, 10 days, 9 days and 10 days in 2022,
2023 and 2024 and six months ended June 30, 2025.
Subsequent settlement
As of October 31, 2025, 100.0% of our total trade and bills receivables as of June 30,
2025, or RMB244.9 million, were settled.
Prepayment and Other Current Assets
Our prepayments and other current assets primarily include (i) prepayments for wafer
fabrication, packaging and testing, (ii) other receivables from non-controlling interests as a
result of acquisition of XySemi, (iii) input V A T deductible, (iv) current portion of other
non-current assets, which represent the portion of deposit we made to reserve capacity at our
foundry partners that can be applied against the purchase price of the wafers in accordance with
the contract terms, (v) deposits for dividends to be distributed, and (vi) prepayments for costs
incurred in connection with the proposed initial listing of the H shares of the Company.
The table below sets forth the breakdown of our prepayments and other current assets as
of the dates indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(in RMB thousands)
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,855 16,144 215,738 195,165
Less: loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,298) (3,518) (8,086) (9,136)
Prepayments for inventories to
third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,082 24,183 24,533 36,845
Input V A T deductible /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862,261 81,968 108,454 123,332
Current portion of other non-
current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118194,000 243,000 250,000 349,806
Deposits for dividends to be
distributed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 204,642
Prepayments for costs incurred in
connection with the proposed
initial listing of the H shares of
the Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 15,077
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,197 24,243 17,975 26,714
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118320,097 386,020 608,614 942,445
FINANCIAL INFORMATION
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Our prepayments and other current assets increased from RMB320.1 million as of
December 31, 2022 to RMB386.0 million as of December 31, 2023, primarily due to an
increase in current portion of other non-current assets of RMB49.0 million. Our prepayments
and other current assets increased from RMB386.0 million as of December 31, 2023 to
RMB608.6 million as of December 31, 2024, primarily due to an increase in other receivables
resulted from the acquisition of XySemi. As part of the conditions for the acquisition of
XySemi, XySemi was required to transfer a property it owned to one of its then wholly-owned
subsidiaries. Following this, ownership of the subsidiary was transferred to a shareholder of
XySemi. This shareholder, in turn, assumed responsibility for paying the consideration for the
transferred property to us. The corresponding amount receivable was recorded as “other
receivables” in our accounts. To secure the timely and complete repayment of this amount, the
receivables were collateralized by both the equity interests in XySemi and properties owned by
the shareholder. Our prepayments and other current assets increased from RMB608.6 million
as of December 31, 2024 to RMB942.4 million as of June 30, 2025, primarily due to (i) an
increase in current portion of other non-current assets of RMB99.8 million, (ii) an increase in
deposits for dividends to be distributed of RMB204.6 million.
Subsequent utilization/settlement
As of October 31, 2025, 30.3% of our prepayment and other current assets as of June 30,
2025, or RMB286.0 million, were utilized or settled.
Goodwill
We recorded goodwill of RMB783.5 million, RMB410.1 million, RMB617.2 million and
RMB617.2 million as of December 31, 2022, 2023 and 2024 and June 30, 2025. Our goodwill
arose from our acquisitions of Silead, XySemi and Suzhou Freethink. See note 15 to “Appendix
I — Accountants’ Report.”
Impairment tests for CGUs containing goodwill
We perform annual impairment tests on goodwill at the end of the reporting year. For the
purpose of impairment testing as at December 31, 2022, 2023 and 2024, goodwill arising from
the acquisition of SiLead in 2019 was allocated to the SiLead CGU, goodwill arising from the
acquisition of XySemi in 2024 was allocated to the XySemi CGU, and goodwill arising from
the acquisition of Suzhou Freethink in 2019 was allocated to the Freethink CGU. As of June
30, 2025, our management considered there is no indication of impairment as to CGUs
containing goodwill, and as a result no impairment test was considered necessary.
FINANCIAL INFORMATION
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(a) SiLead CGU
The recoverable amount of the SiLead CGU is determined based on value-in-use
calculations. We engaged an independent professional valuer to assist with the
calculation. These calculations use cash flow projections based on financial budgets
approved by management covering a five-year period. The key assumptions used in
estimating the recoverable amounts are as follows:
As of December 31,
2022 2023 2024
(RMB’000)
Annual revenue growth rates
during the five-year period (1) /H1118/H1118 6%-36% 8%-31% 3%-16%
Net profit margin (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184%-11% 1%-9% 2%-11%
Growth rate beyond the five-year
period (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180% 0% 0%
Pre-tax discount rate (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811.64% 10.61% 10.65%
Notes:
(1) The annual revenue growth rates and net profit margin are based on current operational status and
future business plan of the CGU, and our historical experience and forecast of the semiconductor
markets.
(2) The growth rate beyond the five-year period does not exceed the average growth rate of the
relevant industry.
(3) The pre-tax discount rate reflects specific risks relating to the SiLead CGU.
Our management considered that attributable to the delay in the commercial
production of certain customers’ products which resulted in the SiLead CGU not meeting
the original expected business results, and based on the above assessments, concluded
that impairment losses of RMB241,491,000 and RMB373,372,000 were required at
December 31, 2022 and 2023, respectively, and such losses were recognised in the
consolidated statements of profit or loss for the years ended December 31, 2022 and 2023,
respectively. As at December 31, 2024, the amount of headroom for SiLead CGU was
RMB14,060,000.
FINANCIAL INFORMATION
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Our management have undertaken sensitivity analysis on the impairment test of
goodwill and identified a reasonably possible change in key parameters that would cause
the carrying amount of the CGU to exceed its recoverable amount. The following table
sets out the hypothetical change to pre-tax discount rate that would have removed the
remaining headroom:
As of December 31, 2024 SiLead CGU
Pre-tax discount rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118+2.0%
(b) XySemi CGU
The recoverable amount of the XySemi CGU is determined based on value-in-use
calculations. We engaged an independent professional valuer to assist with the
calculation. These calculations use cash flow projections based on financial budgets
approved by management covering a five-year period. The key assumptions used in
estimating the recoverable amount are as follows:
As of
December 31,
2024
(RMB’000)
Annual revenue growth rates during the five-year period (1) /H1118/H1118/H11182%-24%
Net profit margin (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827%-29%
Growth rate beyond the five-year period (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180%
Pre-tax discount rate (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815.26%
Notes:
(1) The annual revenue growth rates and net profit margin are based on current operational status and
future business plan of the CGU, and our historical experience and forecast of the semiconductor
markets.
(2) The growth rate beyond the five-year period does not exceed the average growth rate of the
relevant industry.
(3) The pre-tax discount rate reflects specific risks relating to the XySemi CGU.
As at December 31, 2024, the amount of headroom for XySemi CGU was
RMB39,116,000.
FINANCIAL INFORMATION
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Our management has undertaken sensitivity analysis on the impairment test of
goodwill and identified a reasonably possible change in key parameters that would cause
cause the carrying amount of the CGU to exceed its recoverable amount. The following
table sets out the hypothetical change to pre-tax discount rate that would have removed
the remaining headroom:
As of December 31, 2024 XySemi CGU
Pre-tax discount rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118+5.0%
Intangible Assets
During the Track Record Period, our intangible assets mainly included development
expenditure, patents and proprietary technologies and software and others. We recorded
intangible assets of RMB460.8 million, RMB440.9 million, RMB604.2 million and RMB654.6
million as of December 31, 2022, 2023 and 2024 and June 30, 2025, respectively. See note 14
to “Appendix I — Accountants’ Report.”
We identify the development of each potential product under individual project.
Generally, it takes us one to three years to convert capitalised development expenditure under
each individual projects into patents and proprietary technologies, which is taking at the point
of time when we are able to mass produce the products using these patents and proprietary
technologies to meet market demands. We categorise the above projects into various product
types and performs impairment tests on each category comprising these capitalised
development expenditures annually. For the purpose of impairment testing, capitalised
development expenditure is allocated to CGUs comprising the assets and liabilities that are
expected to generate cash flows with such development expenditures. The recoverable amounts
of the CGUs comprising capitalised development expenditures are determined based on
value-in-use calculations. We engaged an independent professional valuer to assist with the
calculations. These calculations use cash flow projections based on financial budgets approved
by the management covering a period of six to eight years, in light of the expected overall life
cycle of these projects. The key assumptions used in estimating the recoverable amounts are
as follows:
As of December 31,
2022 2023 2024
Gross profit margin (1) /H1118/H1118/H1118/H1118/H111813%-48% 12%-49% 10%-44%
Pre-tax discount rate (2) /H1118/H1118/H1118/H111814.86%-15.13% 14.65%-15.29% 16.07%
FINANCIAL INFORMATION
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Notes:
(1) The gross profit margin is based on current operational status and future business plan of the CGU, and
our historical experience and forecast of the semiconductor markets.
(2) The pre-tax discount rate reflects specific risks relating to the respective CGUs comprising development
expenditures.
The Group performs annual impairment tests on development expenditure at the end of
the reporting year. In carrying out the impairment testing, our management also considers the
commercial feasibility of the potential products that will be produced under each project and
its related market demand. Based on the impairment testing carried out by our management
during the Track Record Period, it had been determined that the previous capitalised
development expenditure of RMB2,630,000 was considered to be no longer commercially
feasible and has been fully impaired as of December 31, 2023, and accordingly, the related
impairment loss was recognised in profit or loss in 2023. Apart from the above impaired
development expenditure, the amounts of headroom for CGUs comprising the remaining
capitalised development expenditure amounted to RMB696,178,000, RMB1,313,047,000 and
RMB1,040,597,000 as of December 31, 2022, 2023 and 2024, respectively. As at 30 June 2025,
the management of the Group considered there is no indication of impairment as to CGUs
comprising development expenditure, and as a result no impairment test was considered
necessary.
Our management has undertaken sensitivity analyses on the impairment test of CGUs
comprising development expenditure and identified a reasonably possible change in key
parameters would not cause the carrying amount of the CGUs to exceed its recoverable amount.
The following tables set out the hypothetical change to gross profit margin that would have
removed the remaining headroom:
As of December 31
2022 2023 2024
Gross profit margin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118-76% to -15% -78% to -13% -58% to -7%
Our management believes that a reasonably possible change in the above key parameters
would not cause the carrying amount of the CGUs to exceed its recoverable amount.
FINANCIAL INFORMATION
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Trade Payables
Our trade payables are primarily for contract manufacturing and raw materials, masks,
software and IT services. Our trade payables are non-interest-bearing and are normally settled
on 15 days to two months terms.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(in RMB thousands)
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118479,266 501,844 733,599 718,997
As of December 31, 2022, 2023 and 2024, we recorded trade payables of RMB479.3
million, RMB501.8 million and RMB733.6 million. Such continuous increase in our trade
payables during the Track Record Period was primarily due to our continuously increased
procurement. In particular, our trade payables increased from RMB501.8 million as of
December 31, 2023 to RMB733.6 million as of December 31, 2024, primarily due to our
increased procurement in 2024 in anticipation of the further recovery in market demands. Our
trade payables decreased from RMB733.6 million as of December 31, 2024 to RMB719.0
million as of June 30, 2025, primarily due to the subsequent settlements with our suppliers.
Aging Analysis
The table below sets forth the breakdown of the aging analysis of the trade payables.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(in RMB thousands)
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118475,291 464,941 732,588 717,990
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118804 35,852 66 40
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,847 585 7 30
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,324 466 938 937
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118479,266 501,844 733,599 718,997
FINANCIAL INFORMATION
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Turnover Days
The table below sets forth the turnover days for the trade payables for the years/period
indicated.
Y ear Ended December 31,
Six Months
Ended
June 30,
2022 2023 2024 2025
Trade payables turnover days (1) /H1118/H1118/H1118 45 45 48 50
Note:
(1) Trade payables turnover days for each year/period equal the average of the beginning and ending balances of
trade payables for that year/period divided by cost of sales for that year/period and multiplied by 365 days for
the year ended December 31, and 180 days for the six months ended June 30.
Our trade payables turnover days remained relatively stable at 45, 45, 48 and 50 days in
2022, 2023 and 2024 and six months ended June 30, 2025, respectively.
Subsequent settlement
As of October 31, 2025, 99.0% of our total trade payables as of June 30, 2025, or
RMB711.4 million, were settled.
Contract Liabilities
Our contract liabilities comprise prepayments received from customers.
The table below sets forth the breakdown of the contract liabilities as of the dates
indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(in RMB thousands)
Prepayments received from
customers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111882,917 88,091 94,532 135,224
Our contract liabilities increased from RMB82.9 million as of December 31, 2022 to
RMB88.1 million as of December 31, 2023, primarily due to an increase in prepayment
received for the customized development services. Our contract liabilities increased from
FINANCIAL INFORMATION
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--- page 305 ---
RMB88.1 million as of December 31, 2023 to RMB94.5 million as of December 31, 2024, and
further to RMB135.2 million as of June 30, 2025, primarily due to an increase in prepayments
received for the sales of our products as a result of the gradual recovery of the end markets.
Subsequent recognition
As of October 31, 2025, 69.5% of our total contract liabilities as of June 30, 2025, or
RMB94.0 million, were recognized as revenue.
Accruals and Other Payables
Our accruals and other payables primarily comprises (i) staff cost payables, (ii) unvested
restricted shares repurchase obligation, (iii) payables for consultancy and technology fee, (iv)
dividends payable, (v) consideration payable for an acquisition of a subsidiary, and (vi) other
taxes and levies payables.
The table below sets forth the breakdown of our accruals and other payables as of the
dates indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(in RMB thousands)
Staff cost payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118234,859 95,498 291,238 202,644
Unvested restricted shares
repurchase obligation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118290,895 192,007 82,140 31,385
Payables for consultancy and
technology fee /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,555 32,272 70,583 80,924
Dividends payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 225,575
Consideration payable for an
acquisition of
a subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 15,123 –
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,833 16,084 40,328 17,875
Financial liabilities measured at
amortised cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118576,142 335,861 499,412 558,403
Other taxes and levies payables /H1118/H1118/H111822,484 15,800 23,319 35,121
598,626 351,661 522,731 593,524
The current portion of our accruals and other payables decreased from RMB598.6 million
as of December 31, 2022 to RMB351.7 million as of December 31, 2023, primarily due to (i)
a decrease in staff cost payables of RMB139.4 million primarily attributable to a decrease in
bonus payables, and (ii) a decrease in unvested restricted shares repurchase obligation of
RMB98.9 million primarily attributable to the vesting of restricted shares after the restriction
FINANCIAL INFORMATION
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--- page 306 ---
period. Our accruals and other payables increased from RMB351.7 million as of December 31,
2023 to RMB522.7 million as of December 31, 2024, primarily due to an increase in staff cost
payables of RMB195.7 million primarily attributable to an increase in bonus payables. Our
accruals and other payables increased from RMB522.7 million as of December 31, 2024 to
RMB593.5 million as of June 30, 2025, primarily due to an increase in dividend payable of
RMB225.6 million, which was partially offset by (i) a decrease in staff cost payable of
RMB88.6 million, primarily attributable to the subsequent payment of bonus and (ii) a decrease
in unvested restricted shares repurchase obligation of RMB50.8 million primarily attributable
to the vesting of restricted shares after the restriction period.
Subsequent settlement
As of October 31, 2025, 31.3% of our total accruals and other payables as of June 30,
2025, or RMB122.0 million, were settled.
Cash Flows
The table below sets forth our cash flows for the years/period indicated.
Y ear Ended December 31,
Six months
ended
June 30,
2022 2023 2024 2025
(in RMB thousands)
Operating profit before working
capital changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,936,269 965,034 1,658,569 952,540
Changes in working capital /H1118/H1118/H1118/H1118/H1118/H1118(1,617,074) 229,792 368,892 59,469
Income tax (paid)/refunded /H1118/H1118/H1118/H1118/H1118/H1118(369,504) (8,077) 4,769 (54,188)
Net cash generated from operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118949,691 1,186,749 2,032,230 957,821
Net cash used in investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(43,724) (294,903) (669,335) (1,762,846)
Net cash (used in)/generated from
financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(780,313) (572,601) 480,384 (453,838)
Net increase/(decrease) in cash
and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118125,654 319,245 1,843,279 (1,258,863)
Cash and cash equivalents at the
beginning of the year/period /H1118/H1118/H11186,546,991 6,787,205 7,130,888 9,104,159
Effects of foreign exchange rate
changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118114,560 24,438 129,992 (15,619)
Cash and cash equivalents at
the end of the year/period /H1118/H1118/H1118/H11186,787,205 7,130,888 9,104,159 7,829,677
FINANCIAL INFORMATION
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Operating Activities
In the six months ended June 30, 2025, we had net cash generated from operating
activities of RMB957.8 million, which primarily consists of profit before taxation of
RMB596.1 million, adjusted for certain non-cash and non-operating items. Adjustments for
such non-cash and non-operating items primarily include (i) depreciation and amortisation of
RMB244.0 million, (ii) equity-settled share-based payment expenses of RMB84.1 million, and
(iii) net foreign exchange gain of RMB21.7 million. The amount was further adjusted by
changes in working capital, primarily including (i) a decrease in prepayments and other current
assets and other non-current assets of RMB163.8 million and (ii) an increase in contract
liabilities of RMB40.8 million, partially offset by (i) an increase in inventories of RMB58.1
million and (ii) a decrease in accruals and other payables of RMB43.6 million.
In 2024, we had net cash generated from operating activities of RMB2,032.2 million,
which primarily consists of profit before taxation of RMB1,123.7 million, adjusted for certain
non-cash and non-operating items. Adjustments for such non-cash and non-operating items
primarily include (i) depreciation and amortisation of RMB467.3 million, (ii) equity-settled
share-based payment expenses of RMB159.0 million, and (iii) net foreign exchange gain of
RMB97.2 million. The amount was further adjusted by changes in working capital, primarily
including (i) a decrease in prepayments and other current assets and other non-current assets
of RMB240.6 million, (ii) an increase in accruals and other payables of RMB234.5 million, and
(iii) an increase in trade payables of RMB203.9 million, partially offset by (i) an increase in
inventories of RMB267.5 million, and (ii) an increase in trade and bills receivables of
RMB47.5 million.
In 2023, we had net cash generated from operating activities of RMB1,186.7 million,
which primarily consists of profit before taxation of RMB124.7 million, adjusted for certain
non-cash and non-operating items. Adjustments for such non-cash and non-operating items
primarily include (i) depreciation and amortisation of RMB443.7 million, (ii) impairment loss
on goodwill of RMB373.4 million, and (iii) equity-settled share-based payment expenses of
RMB97.1 million. The amount was further adjusted by changes in working capital, primarily
including (i) a decrease in prepayments and other current assets and other non-current assets
of RMB167.0 million, (ii) a decrease in inventories of RMB163.0 million, and (iii) a decrease
in trade and bills receivables of RMB30.2 million, partially offset by a decrease in accruals and
other payables of RMB165.3 million.
In 2022, we had net cash generated from operating activities of RMB949.7 million, which
primarily consists of profit before taxation of RMB2,262.4 million, adjusted for certain
non-cash and non-operating items. Adjustment for such non-cash and non-operating items
primarily include (i) depreciation and amortisation of RMB371.8 million, (ii) impairment loss
on goodwill of RMB241.5 million, and (iii) equity-settled share-based payment expenses of
RMB203.2 million. The amount was further adjusted by working capital, primarily including
(i) an increase in prepayments and other current assets and other non-current assets of
FINANCIAL INFORMATION
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RMB903.0 million, (ii) an increase in inventories of RMB705.0 million, and (iii) a decrease in
trade payables of RMB163.2 million, partially offset by (i) a decrease in trade and bills
receivables of RMB145.8 million, and (ii) an increase in contract liabilities of RMB11.3
million.
Investing Activities
In the six months ended June 30, 2025, we had net cash used in investing activities of
RMB1,762.8 million, which primarily consists of (i) purchase of time deposits of RMB1,330.3
million, (ii) payments for the purchase of property, plant and equipment and intangible assets
of RMB412.5 million and (iii) investment in associates of RMB140.0 million, partially offset
by (i) proceeds from equity securities designated at FVOCI of RMB175.5 million and (ii)
proceeds from redemption of wealth management products measured at FVPL of RMB60.0
million.
In 2024, we had net cash used in investing activities of RMB669.3 million, which
primarily consists of (i) investments in equity securities designated at FVOCI of RMB1,529.7
million, (ii) payments for the purchase of property, plant and equipment and intangible assets
RMB499.0 million, and (iii) purchase of wealth management products measured at FVPL of
RMB420.0 million, partially offset by (i) proceeds from redemption of wealth management
products measured at FVPL of RMB2,100.0 million, and (ii) proceeds from equity securities
designated at FVOCI of RMB119.6 million.
In 2023, we had net cash used in investing activities of RMB294.9 million, which
primarily consists of (i) purchase of wealth management products measured at FVPL of
RMB5,465.0 million, (ii) payments for the purchase of property, plant and equipment and
intangible assets of RMB348.4 million, and (iii) investments in equity securities designated at
FVOCI of RMB78.3 million, partially offset by (i) proceeds from redemption of wealth
management products measured at FVPL of RMB5,505.0 million and (ii) investment income
from wealth management products measured at FVPL of RMB91.7 million.
In 2022, we had net cash used in investing activities of RMB43.7 million, which primarily
consists of (i) purchase of wealth management products measured at FVPL of RMB2,750.0
million, and (ii) payments for the purchase of property, plant and equipment and intangible
assets of RMB550.8 million, partially offset by proceeds from redemption of wealth
management products measured at FVPL of RMB3,310.0 million.
Financing Activities
In the six months ended June 30, 2025, we had net cash used in financing activities of
RMB453.8 million, which primarily consists of (i) repayment of bank loans of RMB678.5
million, (ii) dividends deposited in escrow to be distributed of RMB204.6 million, and (iii)
capital element of lease rentals paid of RMB27.1 million, partially offset by (i) proceeds from
bank loans of RMB400.0 million and (ii) proceeds from share options exercised of RMB77.0
million.
FINANCIAL INFORMATION
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In 2024, we had net cash generated from financing activities of RMB480.4 million, which
primarily consists of (i) proceeds from bank loans of RMB1,269.2 million, and (ii) capital
injection from non-controlling interests of RMB4.5 million, partially offset by (i) repayment
of bank loans of RMB418.7 million, (ii) purchase of own ordinary shares of RMB259.6
million, and (iii) purchase of forfeited restricted shares of RMB55.5 million
In 2023, we had net cash used in financing activities of RMB572.6 million, which
primarily consists of (i) dividends paid of RMB413.6 million, (ii) purchase of own ordinary
shares of RMB102.0 million and (iii) capital element of lease rentals paid of RMB42.1 million,
offset by increase in other non-current liabilities of RMB2.0 million.
In 2022, we had net cash used in financing activities of RMB780.3 million, which
primarily consists of (i) dividends paid of RMB707.5 million, (ii) purchase of forfeited
restricted shares of RMB34.5 million, and (iii) capital element of lease rentals paid of
RMB31.4 million.
INDEBTEDNESS
The table below sets forth the indebtedness as of the dates indicated.
As of December 31,
As of
June 30,
As of
October 31,
2022 2023 2024 2025 2025
(in RMB thousands)
(unaudited)
Current portion
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 898,221 619,575 380,187
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H111834,433 41,876 53,113 62,246 59,605
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,433 41,876 951,334 681,821 439,793
Non-current portion
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H111889,901 74,390 48,023 52,496 48,787
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118124,334 116,266 999,357 734,317 488,580
Bank Loans
As of December 31, 2022, 2023, 2024, June 30, 2025 and October 31, 2025, our bank
loans amounted to nil, nil, RMB898.2 million, RMB619.6 million and RMB380.2 million,
respectively. See note 27 to “Appendix I — Accountants’ Report.” Our bank loans were mainly
for general corporate purposes.
As of October 31, 2025, we had unutilized banking facilities of approximately
RMB3,784.6 million.
FINANCIAL INFORMATION
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Lease Liabilities
The table below sets forth the lease liabilities as of the dates indicated.
As of December 31,
As of
June 30,
As of
October 31,
2022 2023 2024 2025 2025
(in RMB thousands)
(unaudited)
Current
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,433 41,876 53,113 62,246 59,605
Non-current
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111889,901 74,390 48,023 52,496 48,787
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118124,334 116,266 101,136 114,742 108,392
Our lease liabilities decreased from RMB124.3 million as of December 31, 2022 to
RMB116.3 million as of December 31, 2023, and further to RMB101.1 million as of December
31, 2024, primarily due to our payment of rents. Our lease liabilities increased from RMB101.1
million as of December 31, 2024 to RMB114.7 million as of June 30, 2025 primarily due to
the new leases we entered into in the six months ended June 30, 2025.
CONTINGENT LIABILITIES
As of December 31, 2022, 2023, 2024, June 30, 2025 and as of October 31, 2025, and up
to the Latest Practicable Date, we did not have any contingent liabilities.
Save as disclosed above, we did not have any bank and other loan, or any loan capital
issued and outstanding or agreed to be issued, bank overdraft, borrowing or similar
indebtedness, liabilities under acceptance (other than normal trade bills) or acceptance credits,
debentures, mortgages, charges, hire purchases or finance lease commitments, guarantees or
other material contingent liabilities as of the Latest Practicable Date for our indebtedness
statement. We did not have any material covenants and undertakings on outstanding debts,
guarantees, pledge of key assets or other contingent obligations, and breaches during the Track
Record Period and up to the Latest Practicable Date. Our Directors confirm that there has not
been any material change in our indebtedness since the October 31, 2025 up to the date of this
prospectus. Our Directors confirm that we did not have any material defaults on trade and
non-trade payables and borrowings, breaches of covenants, or experience any material
difficulty in obtaining bank loans and other borrowings during the Track Record Period and up
to the date of this prospectus.
FINANCIAL INFORMATION
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CAPITAL EXPENDITURE AND COMMITMENTS
Capital Expenditure
The table below sets forth the capital expenditure for the years/period indicated.
Y ear Ended December 31,
Six months
ended
June 30,
2022 2023 2024 2025
(in RMB thousands)
Payments for the purchase of
property, plant and equipment
and intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118550,843 348,363 499,018 412,484
Total capital expenditure /H1118/H1118/H1118/H1118/H1118/H1118/H1118550,843 348,363 499,018 412,484
During the Track Record Period, our capital expenditure was primarily for property, plant
and equipment, such as masks and R&D equipment, and intangible assets such as licensed IPs.
Capital Commitments
The table below sets forth the capital commitments as of the dates indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(in RMB thousands)
Contracted for capital injections
into equity securities measured
at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118615,000 485,400 635,400 515,400
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118615,000 485,400 635,400 515,400
FINANCIAL INFORMATION
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KEY FINANCIAL RATIOS
Y ear Ended/As of December 31,
Six Months
Ended/As of
June 30,
2022 2023 2024 2025
Gross profit margin (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845.5% 30.3% 35.7% 36.9%
Profit margin (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825.3% 2.8% 15.0% 14.2%
Adjust net profit margin
(a non-IFRS measure) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827.7% 4.5% 17.1% 16.2%
Current ratio (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189.5 11.8 5.3 6.0
Quick ratio (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187.7 9.7 4.3 4.9
Notes:
(1) Gross profit margin is calculated as revenue minus cost of sales divided by revenue, then multiplied by 100%.
(2) Profit margin is calculated as net profit divided by revenue, then multiplied by 100%.
(3) Current ratio is calculated based on the total current assets divided by the total current liabilities as at the end
of the respective years/period.
(4) Quick ratio is calculated as total current assets less inventories divided by the total current liabilities as at the
end of the respective years/period.
DISCLOSURE ABOUT FINANCIAL RISK
We are exposed to credit, liquidity, interest rate and currency risks arises in the normal
course of business, and also exposed to equity price risk arising from our equity investments
in other entities and movements in our own equity share price.
Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations
resulting in a financial loss to us. Our credit risk is primarily attributable to trade receivables
and other receivables. Our management has a credit policy in place and the exposures to these
credit risks are monitored on an ongoing basis. Our exposure to credit risk arising from cash
and cash equivalents and bills receivables is limited because the counterparties are banks and
financial institutions with high credit standing, for which we consider having low credit risk.
See note 32 to “Appendix I — Accountants’ Report.”
FINANCIAL INFORMATION
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Liquidity Risk
Liquidity risk is the risk that we will encounter difficulty in meeting financial obligations
due to shortage of funds. Our exposure to liquidity risk arises primarily from mismatches of
the maturities of financial assets and liabilities. Our objective is to maintain a balance for
continuity of funding to finance our working capital needs as well as capital expenditure. See
note 32 to “Appendix I — Accountants’ Report.”
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market interest rates. Our interest rate risk
arises primarily from bank loans. Instruments bearing interest at variable rates and fixed rates
expose us to cashflow interest rate risk and fair value interest rate risk respectively. We
regularly review our strategy on interest rate risk management in the light of the prevailing
market condition. Our interest rate risk profile as monitored by management is set out below.
See note 32 to “Appendix I — Accountants’ Report.”
Currency Risk
We are exposed to currency risk primarily through sales and purchases which give rise to
receivables, payables and cash balances that are denominated in a foreign currency, i.e. a
currency other than the functional currency of the operations to which the transactions relate.
The currencies giving rise to this risk are primarily USD.
We closely monitor the impact of exchange rate fluctuations on our currency risk. We
ensure that the net exposure is kept to an acceptable level by buying or selling foreign
currencies at spot rates where necessary to address short-term imbalances. We use foreign
exchange forward contracts to manage our currency risk until the settlement date of foreign
currency receivables or payables and these foreign exchange forward contracts have a maturity
of less than one year from the reporting date. Changes in the fair value of foreign exchange
forward contracts that economically hedge monetary assets and liabilities denominated in
foreign currencies are recognised in profit or loss. See note 32 to “Appendix I — Accountants’
Report.”
OFF-BALANCE SHEET ARRANGEMENTS
We have not entered into, nor do we expect to enter into, any off-balance sheet
arrangements. We also have not entered into any financial guarantees or other commitments to
guarantee the payment obligations of manufacturing partners. In addition, we have not entered
into any derivative contracts that are indexed to our equity interests and classified as owners’
equity. We do not have any variable interest in any unconsolidated entity that provides
financing, liquidity, market risk or credit support to us or engages in leasing or hedging or
research and development services with us.
FINANCIAL INFORMATION
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DIVIDEND POLICY
Our declaration and payment of dividends are subject to PRC laws and regulations,
including the PRC Company Law () and the No. 3 Guideline for
the Supervision of Listed Companies — Cash Dividend Distribution of Listed Companies
(2025 Revision) (ˏୋ3໮ –ߎ2025ࠈࡌ)) and the
Articles of Association.
We have established our dividend policy as prescribed in the Articles of Association. As
a principle, our profit distribution should emphasize providing reasonable investment returns
to public shareholders, with the aim of sustainable development and safeguarding
shareholders’ rights and interests. Under the condition that the Company’s normal production
and operational funding needs are met, if there have been no significant adverse changes in the
company’s external business environment or operating conditions, and the distributable profit
for the year is positive, we shall distribute no less than 20% of the distributable profits realized
in a given year in the form of cash dividends each year. Moreover, over any consecutive
three-year period, the total cash dividends distributed shall be no less than 60% of the average
annual distributable profits realized during those three years. Save as prescribed in the Articles
of Association, we do not set other payout ratio target. Future profit distributions may be
carried out in the form of cash dividends or stock dividends or a combination of cash dividends
and stock dividends. Any proposed distribution of dividends is subject to the discretion of our
Board and the approval at our Shareholders’ meetings. Our Board may recommend a
distribution of dividends in the future after taking into account factors including:
 industry characteristics;
 stage of development;
 business model;
 profitability of the relevant year/period;
 whether there are significant capital expenditure plans; and
 any other conditions that our Board may deem relevant.
During the Track Record Period, we have declared dividends. In 2022, 2023, 2024 and the
six months ended June 30, 2025, we declared and approved the final dividends of RMB707.5
million, RMB413.6 million, nil and RMB225.6 million, respectively. See note 31 to “Appendix
I — Accountants’ Report.”
DISTRIBUTABLE RESERVE
As of June 30, 2025, the Company has distributable reserves of RMB5,136.7 million.
FINANCIAL INFORMATION
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DISCLOSURE REQUIRED UNDER RULES 13.13 TO 13.19 OF THE LISTING RULES
Except as otherwise disclosed in this prospectus, our Directors confirm that, as of the
Latest Practicable Date, they were not aware of any circumstances that would give rise to a
disclosure requirement under Rules 13.13 to Rules 13.19 of the Listing Rules.
RELATED-PARTY TRANSACTIONS
Related party transactions are set out in note 35 to “Appendix I — Accountants’ Report.”
Our Directors confirm that these transactions were conducted in the ordinary and usual course
of business and on an arm’s length basis.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma statement of adjusted net tangible assets of us is
prepared in accordance with Rule 4.29 of the Listing Rules and is set out below to illustrate
the effect of the Global Offering on the consolidated net tangible assets attributable to equity
shareholders of us as of June 30, 2025 as if the Global Offering had taken place on June 30,
2025.
The unaudited pro forma statement of adjusted net tangible assets has been prepared for
illustrative purposes only and because of its hypothetical nature, it may not give a true picture
of the financial position of us had the Global Offering been completed as of June 30, 2025 or
at any future date.
Consolidated net
tangible assets
attributable
to equity
shareholders of
the Company as
of June 30, 2025
Estimated net
proceeds from
the Global
Offering
Unaudited pro
forma adjusted net
tangible assets
attributable
to equity
shareholders of
the Company
Unaudited pro forma
adjusted net tangible
assets per Share
RMB’000 RMB’000 RMB’000 RMB HK$
Note (1) Note (2) Note (3) Note (4)
Based on an Offer Price of
HK$132.00 per H Share /H1118/H1118 15,990,988 3,402,166 19,393,154 28.02 30.89
Based on an Offer Price of
HK$162.00 per H Share /H1118/H1118 15,990,988 4,182,595 20,173,583 29.15 32.14
Notes:
(1) The consolidated net tangible assets attributable to equity shareholders of the Company as of June 30, 2025
is arrived at after (i) deducting goodwill of RMB617.2 million and intangible assets of RMB654.6 million; and
(ii) adjusting the share of intangible assets attributable to non-controlling interests of RMB22.9 million from
the consolidated total equity attributable to equity shareholders of the Company of RMB17,239.9 million as
of June 30, 2025, which is extracted from the Accountants’ Report as set out in Appendix I in this prospectus.
FINANCIAL INFORMATION
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(2) The estimated net proceeds from the Global Offering are based on the expected issuance of 28,915,800 H
Shares and the indicative offer prices of HK$132.00 per H Share (being the minimum Offer Price) and
HK$162.00 per H Share (being the maximum Offer Price), after deduction of the estimated underwriting fees
and other estimated expenses related to the Global offering paid or payable by the Group (excluding the listing
expenses charged to profit or loss during the Track Record Period), and do not take into account any H Shares
which may be issued upon the exercise of the Offer Size Adjustment Option and the Over-allotment Option
and any Shares that may be issued under the Share Incentive Plans.
For illustrative purpose, the estimated net proceeds of the Global Offering have been converted into RMB at
an exchange rate of HK$1 to RMB0.90699. No representation is made that HK$ amounts have been, could
have been or may be converted into RMB, or vice versa, at that rate or at any other rate.
(3) The unaudited pro forma adjusted net tangible assets per Share is arrived at after adjustments referred to in
the preceding paragraphs and on the basis that 692,028,799 Shares (being 664,059,190 Shares in issue as at
June 30, 2025, deducting repurchased ordinary shares held by the Company and unvested restricted shares
under the 2021 Restricted Share Incentive Plan as at June 30, 2025 of 946,191 shares and adding 28,915,800
H Shares to be issued pursuant to the Global Offering) were in issue immediately following the completion
of the Global Offering, and does not take into account any H shares which may be issued upon the exercise
of the Offer Size Adjustment Option and the Over-allotment Option and any Shares that may be issued under
the Share Incentive Plans.
(4) The unaudited pro forma adjusted net tangible assets per Share is converted to HK$ with an exchange rate of
RMB1 to HK$1.10255. No representation is made that RMB amounts have been, could have been or may be
converted to HK$, or vice versa, at that rate or at any other rate.
(5) No adjustment has been made to reflect any trading results or other transactions of the Group entered into
subsequent to June 30, 2025.
LISTING EXPENSES
Listing expenses represent professional fees, underwriting commission and fees incurred
in connection with the Listing and the Global Offering. Our listing expenses are estimated to
be approximately HK$70.0 million (including underwriting commission) accounting for 1.65%
of the gross proceeds of the Global Offering (assuming that an Offer Price of HK$147.00 per
Share (being the mid-point of the Offer Price range stated in this prospectus), and no exercise
of the Offer Size Adjustment Option and Over-allotment Option). Among our listing expenses,
approximately HK$64.5 million is directly attributable to the issuance of Shares and will be
charged to equity upon completion of the Listing, and approximately HK$5.5 million has been
or will be charged to our consolidated statements of profit or loss and other comprehensive
income. The listing expenses we expect to incur would consist of approximately HK$35.7
million underwriting related expenses and fees (including underwriting commissions, SFC
transaction levy, Stock Exchange trading fee and AFRC transaction levy), approximately
HK$26.4 million non-underwriting-related expenses and fees including fees for the Joint
Sponsors, legal advisors and reporting accountants and approximately HK$7.9 million for
other non-underwriting-related fees and expenses. During the Track Record Period, we
incurred RMB15.7 million of listing expenses, among which, RMB15.1 million is directly
attributable to the issue of shares and will be deducted from equity upon completion of the
Listing and RMB0.6 million was charged to our consolidated statements of profit or loss and
other comprehensive income.
The listing expenses above are the latest practicable estimate for reference only, and the
actual amount may differ from this estimate.
FINANCIAL INFORMATION
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--- page 317 ---
RECENT DEVELOPMENTS AND NO MATERIAL ADVERSE CHANGE
Unaudited Financial Information for the Nine Months Ended September 30, 2025
We are a public company listed on the Shanghai Stock Exchange and we have disclosed
unaudited key financial information prepared under PRC GAAP as of and for the nine months
ended September 30, 2025 pursuant to the relevant PRC securities laws and regulations. We
have included our unaudited interim condensed consolidated financial information prepared in
accordance with IAS 34, Interim Financial Reporting as of and for the nine months ended
September 30, 2025 in Appendix IA to this Prospectus. Our unaudited interim condensed
consolidated financial information as of and for the nine months ended September 30, 2025 has
been reviewed by our reporting accountant in accordance with Hong Kong Standard on Review
Engagements 2410, Review of Interim Financial Information Performed by the Independent
Auditor of the Entity.
Revenue
Our revenue increased by 20.9% from RMB5,649.6 million in the nine months ended
September 30, 2024 to RMB6,831.6 million in the nine months ended September 30, 2025,
primarily due to an increase in our sales volume.
Cost of Sales
Our cost of sales increased by 19.4% from RMB3,529.1 million in the nine months ended
September 30, 2024 to RMB4,214.1 million in the nine months ended September 30, 2025,
which was generally in line with the growth of our revenue.
Gross Profit
Our gross profit increased by 23.4% from RMB2,120.5 million in the nine months ended
September 30, 2024 to RMB2,617.5 million in the nine months ended September 30, 2025,
primarily due to the increase in revenue. Our gross profit margin remained relatively stable at
37.5% and 38.3% in the nine months ended September 30, 2024 and 2025, respectively.
Other Income
Our other income decreased by 3.3% from RMB246.6 million in the nine months ended
September 30, 2024 to RMB238.5 million in the nine months ended September 30, 2025,
primarily due to the decrease in interest income.
Selling and Distribution Expenses
Our selling and distribution expenses increased by 24.4% from RMB277.6 million in the
nine months ended September 30, 2024 to RMB345.3 million in the nine months ended
September 30, 2025, primarily due to an increase in salaries, compensations and benefits. As
a percentage of our revenue, the selling and distribution expenses remained relatively stable at
4.9% and 5.1% in the nine months ended September 30, 2024 and 2025, respectively.
FINANCIAL INFORMATION
– 307 –


--- page 318 ---
Administrative Expenses
Our administrative expenses increased by 36.2% from RMB355.0 million in the nine
months ended September 30, 2024 to RMB483.7 million in the nine months ended September
30, 2025, primarily due to an increase in salaries, compensations and benefits. As such, as a
percentage of our revenue, the administrative expenses increased from 6.3% in the nine months
ended September 30, 2024 to 7.1% in the nine months ended September 30, 2025.
Research and Development Expenses
Our research and development expenses remained relatively stable at RMB845.9 million
and RMB860.0 million in the nine months ended September 30, 2024 and 2025. As a
percentage of our revenue, the research and development decreased from 15.0% in the nine
months ended September 30, 2024 to 12.6% in the nine months ended September 30, 2025, as
a result of our increased revenue in the nine months ended September 30, 2025.
Profit for the Period
As a result of the foregoing, our profit for the period increased by 32.7% from RMB832.1
million in the nine months ended September 30, 2024 to RMB1,104.4 million in the nine
months ended September 30, 2025.
Asset and Liabilities
Our total assets increase from RMB19,228.8 million as of December 31, 2024 to
RMB20,756.3 million as of September 30, 2025, primarily reflecting our business growth. Our
total liabilities decreased from RMB2,550.1 million as of December 31, 2024 to RMB2,356.3
million as of September 30, 2025, primarily due to a decrease in bank loans and accruals and
other payables, partially offset by an increase in contract liabilities. As a result, our net assets
increased from RMB16,678.8 million as of December 31, 2024 to RMB18,400.0 million as of
September 30, 2025.
Cash Flow
In the nine months ended September 30, 2025, we recorded net cash flow generated from
operating activities of RMB1,795.6 million, net cash flow used in investing activities of
RMB1,041.3 million, and net cash flow used in financing activities of RMB180.4 million.
No Material Adverse Change
Our Directors confirmed that, as of the date of this prospectus, there has been no material
adverse change in our financial position since June 30, 2025, and there has been no event since
June 30, 2025, that would materially affect the information as set out in the Accountants’
Report in Appendix I to this prospectus.
FINANCIAL INFORMATION
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--- page 319 ---
BEFORE THE GLOBAL OFFERING
As of the Latest Practicable Date, the total issued share capital of the Company was
RMB667,849,351, comprising 667,849,351 A Shares of nominal value RMB1.00 each, all of
which are listed on the Shanghai Stock Exchange.
UPON COMPLETION OF THE GLOBAL OFFERING
Immediately following the completion of the Global Offering (assuming the Offer Size
Adjustment Option and the Over-allotment Option are not exercised and no additional Shares
are issued pursuant to the Share Incentive Plans), the issued share capital of the Company will
be as follows:
Number of Shares
Approximately %
of issued
share capital
A Shares in issue (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118667,849,351 95.85%
H Shares to be issued pursuant to the Global Offering /H1118 28,915,800 4.15%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118696,765,151 100.00%
Note:
(1) Including 603,020 A Shares held by the Company as treasury shares as of the Latest Practicable Date.
Immediately following the completion of the Global Offering (assuming the Offer Size
Adjustment Option is exercised in full, the Over-allotment Option is not exercised and no
additional Shares are issued pursuant to the Share Incentive Plans), the issued share capital of
the Company will be as follows:
Number of Shares
Approximately %
of issued share
capital
A Shares in issue (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118667,849,351 95.45%
H Shares to be issued pursuant to the Global Offering /H1118 31,807,300 4.55%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118699,656,651 100.00%
Note:
(1) Including 603,020 A Shares held by the Company as treasury shares as of the Latest Practicable Date.
SHARE CAPITAL
– 309 –


--- page 320 ---
Immediately following the completion of the Global Offering (assuming the Offer Size
Adjustment Option is not exercised, the Over-allotment Option is exercised in full and no
additional Shares are issued pursuant to the Share Incentive Plans), the issued share capital of
the Company will be as follows:
Number of Shares
Approximately %
of issued
share capital
A Shares in issue (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118667,849,351 95.26%
H Shares to be issued pursuant to the Global Offering /H1118 33,253,100 4.74%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118701,102,451 100.00%
Note:
(1) Including 603,020 A Shares held by the Company as treasury shares as of the Latest Practicable Date.
Immediately following the completion of the Global Offering (assuming the Offer Size
Adjustment Option and the Over-allotment Option are exercised in full and no additional
Shares are issued pursuant to the Share Incentive Plans), the issued share capital of the
Company will be as follows:
Number of Shares
Approximately %
of issued share
capital
A Shares in issue (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118667,849,351 94.81%
H Shares to be issued pursuant to the Global Offering /H1118 36,578,300 5.19%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118704,427,651 100.00%
Note:
(1) Including 603,020 A Shares held by the Company as treasury shares as of the Latest Practicable Date.
THE SHARES
Upon the completion of the Global Offering, the Shares of the Company will consist of
A Shares and H Shares. The A Shares and H Shares are all ordinary Shares in the share capital
of the Company. Apart from certain qualified domestic institutional investors in Chinese
Mainland, the qualified investors in Chinese Mainland under the Shanghai-Hong Kong Stock
Connect and the Shenzhen-Hong Kong Stock Connect (if the H Shares are eligible securities
for that purpose) and other persons who are entitled to hold the H Shares pursuant to relevant
PRC law or upon approvals of any competent authorities, H Shares generally cannot be
subscribed for by or traded between legal or natural persons in Chinese Mainland.
SHARE CAPITAL
– 310 –


--- page 321 ---
Shanghai-Hong Kong Stock Connect has established a stock connect mechanism between
Chinese Mainland and Hong Kong. The A Shares can be traded by investors in Chinese
Mainland, qualified foreign institutional investors or qualified foreign strategic investors and
must be traded in Renminbi. As the A Shares are eligible securities under the Northbound
Trading Link, they can also be traded by Hong Kong and other overseas investors pursuant to
the rules and limits of Shanghai-Hong Kong Stock Connect. If the H Shares are eligible
securities under the Southbound Trading Link, they can also be traded by investors in Chinese
Mainland in accordance with the rules and limits of Shanghai-Hong Kong Stock Connect or
Shenzhen-Hong Kong Stock Connect.
The A Shares and H Shares are generally neither interchangeable nor fungible, and the
market prices of the A Shares and H Shares may be different after the Listing. The Guidelines
on Application for “Full Circulation” of Domestic Unlisted Shares of H-share Companies (H
΅͡ሗ“ஷ”ˏ) announced by the CSRC are not applicable to
companies dual listed in the PRC and on the Stock Exchange. As of the Latest Practicable Date,
there were no relevant rules or guidelines from the CSRC providing that A Shareholders may
convert A Shares held by them into H Shares for listing and trading on the Stock Exchange.
RANKING
The A Shares and H Shares are regarded as one class of Shares under the Articles of
Association and shall rank pari passu with each other in all other respects and, in particular,
will rank equally for dividends or distributions declared, paid or made after the date of this
prospectus.
APPROV AL FROM A SHAREHOLDERS REGARDING THE GLOBAL OFFERING
The Company obtained its A Shareholders’ approval to issue H Shares and seek the listing
of H Shares on the Stock Exchange at the extraordinary general meeting of the Company held
on June 10, 2025. Such approval is subject to the following conditions:
(i) Size of the offer . The proposed number of H Shares to be offered shall not exceed
10% of the total issued share capital enlarged by the H Shares to be issued pursuant
to the Global Offering (before the exercise of the Over-allotment Option). The
number of H Shares to be issued pursuant to the full exercise of the Over-allotment
Option shall not exceed 15% of the total number of H Shares to be offered initially
under the Global Offering.
(ii) Method of offering. The method of offering shall be by way of an international
offering to institutional investors and a public offer for subscription in Hong Kong.
(iii) Target investors. The H Shares shall be issued to public investors in Hong Kong
under the Hong Kong Public Offering and international investors, qualified domestic
institutional investors in Chinese Mainland and other investors who are approved by
mainland Chinese regulatory bodies to invest abroad in International Offering.
SHARE CAPITAL
–3 1 1–


--- page 322 ---
(iv) Price determination basis. The issue price of the H Shares will be determined,
among others, after due consideration of the interests of existing Shareholders of the
Company, acceptance of investors and the risks related to the offering, according to
international practice, through the demands for orders and book building process,
subject to the domestic and overseas capital market conditions and by reference to
the valuation level of comparable companies in domestic and overseas markets.
(v) V alidity period. The issue of H Shares and listing of H Shares on the Hong Kong
Stock Exchange shall be completed within 24 months from the date when the
Shareholders’ meeting was held on June 10, 2025.
There is no other approved offering plan for the Shares except the Global Offering.
GENERAL MEETINGS
For details of circumstance under which general meetings of the Company are required,
see “Summary of the Articles of Association — Shareholders and General Meeting” in
Appendix III to this prospectus.
SHARE SCHEMES
For details of the Share Incentive Plans, see “Statutory and General Information — Share
Incentive Plans” in Appendix IV to this prospectus.
SHARE CAPITAL
– 312 –


--- page 323 ---
So far as the Directors are aware, immediately following the completion of the Global
Offering (assuming the Offer Size Adjustment Option and the Over-allotment Option are not
exercised and no additional Shares are issued pursuant to the Share Incentive Plans), the
following persons will have an interest or short position in the Shares and/or underlying Shares
of the Company which would fall to be disclosed to the Company under the provisions of
Divisions 2 and 3 of Part XV of the SFO, or will be, directly or indirectly, interested in 10%
or more of the issued voting Shares of the Company.
Name of Shareholder Nature of interest
Number and
description of
Shares or
underlying
Shares held
Shareholding as of the
Latest Practicable Date
Shareholding upon
completion of the Global
Offering (1)
in A Shares
in total
issued share
capital in A Shares
in total
issued share
capital
Mr. Zhu Yiming (2) /H1118/H1118Beneficial owner
Interest held jointly
with other persons
58,811,513
A Shares
8.81% 8.81% 8.81% 8.44%
InfoGrid
Limited (2)(3) /H1118/H1118/H1118/H1118/H1118
Beneficial owner
Interest held jointly
with other persons
58,811,513
A Shares
8.81% 8.81% 8.81% 8.44%
Notes:
(1) The calculation is based on the total number of 696,765,151 Shares in issue immediately following the
completion of the Global Offering (assuming the Offer Size Adjustment Option and the Over-allotment Option
are not exercised and no additional Shares are issued pursuant to the Share Incentive Plans).
(2) InfoGrid Limited has issued the Acting-in-Concert Undertaking. By virtue of the SFO, Mr. Zhu Yiming and
InfoGrid Limited are deemed to be interested in the Shares held by each other.
(3) As of the Latest Practicable Date, InfoGrid Limited was held by Mr. Shu Qingming as to 82.82%. By virtue
of the SFO, Mr. Shu Qingming is deemed to be interested in the Shares that InfoGrid Limited is interested in.
SUBSTANTIAL SHAREHOLDERS
– 313 –


--- page 324 ---
THE CORNERSTONE PLACING
The Company has entered into cornerstone investment agreements (each a “ Cornerstone
Investment Agreement ,” and together the “ Cornerstone Investment Agreements ”) with the
cornerstone investors set out below (each a “ Cornerstone Investor ”, and together the
“Cornerstone Investors ”), pursuant to which the Cornerstone Investors have agreed to,
subject to certain conditions, subscribe, or cause their designated entities to subscribe, at the
Offer Price, for such number of Offer Shares (rounded down to the nearest whole board lot of
100 H Shares) that may be purchased for an aggregate amount of approximately US$299.70
million (or approximately HK$2,331.94 million, calculated based on an exchange rate of
US$1.00 to HK$7.78090) and exclusive of brokerage fee, the SFC transaction levy, the AFRC
transaction levy and the Stock Exchange trading fee (the “ Cornerstone Placing ”).
Pursuant to paragraph 3.2 of Practice Note 18 to the Listing Rules, at least 40% of the
total number of Offer Shares initially offered in the Global Offering must be allocated to
investors in the placing tranche (other than the Cornerstone Investors). As the Company is
initially offering approximately 10% of the total number of Offer Shares in the Hong Kong
Public Offering, no more than 50% of the total number of the Offer Shares initially offered in
the Global Offering can be allocated to all Cornerstone Investors (the “ Cornerstone Placing
Allocation Limit ”). Each of the Cornerstone Investors has agreed in their respective
Cornerstone Investment Agreements that the Company, the Joint Sponsors and the Overall
Coordinators shall have the right to, in their sole and absolute discretion, adjust the allocation
of the number of Offer Shares to be subscribed for by the relevant Cornerstone Investor to
ensure compliance with the Listing Rules, including the Cornerstone Placing Allocation Limit.
Accordingly, the Company, the Joint Sponsors and the Overall Coordinators will adjust the
allocation of the number of Offer Shares to be subscribed for by the Cornerstone Investors in
proportion to their respective initial subscription amounts set out in their respective
Cornerstone Investment Agreements to ensure compliance with the Cornerstone Placing
Allocation Limit in the event that the final Offer Price is set at HK$161.28 or lower, and will
disclose the number of the Offer Shares finally allocated to each of the Cornerstone Investors
in the allotment results announcement of the Company to be published on or around Monday,
January 12, 2026.
Based on the Offer Price of HK$162.00 per Offer Share, being the high-end of the
indicative Offer Price range set out in this prospectus, the total number of Offer Shares to be
subscribed for by the Cornerstone Investors would be 14,394,300 H Shares. The table below
reflects the shareholding percentage immediately after the completion of the Global Offering
assuming there is no other change made to the issued share capital of the Company between
the Latest Practicable Date and the Listing.
CORNERSTONE INVESTORS
– 314 –


--- page 325 ---
Assuming the Offer Size Adjustment Option
is not exercised
Assuming the Offer Size Adjustment Option
is exercised in full
Assuming the
Over-allotment Option is
not exercised
Assuming the
Over-allotment Option is
exercised in full
Assuming the
Over-allotment Option is
not exercised
Assuming the
Over-allotment Option is
exercised in full
%o ft h e
Offer Shares
%o ft h e
total issued
share capital
%o ft h e
Offer Shares
%o ft h e
total issued
share capital
%o ft h e
Offer Shares
%o ft h e
total issued
share capital
%o ft h e
Offer Shares
%o ft h e
total issued
share capital
49.78% 2.07% 43.29% 2.05% 45.25% 2.06% 39.35% 2.04%
Based on the Offer Price of HK$147.00 per Offer Share, being the mid-point of the
indicative Offer Price range set out in this prospectus, the total number of Offer Shares to be
subscribed for by the Cornerstone Investors would be 14,457,400 H Shares
(1). The table below
reflects the shareholding percentage immediately after the completion of the Global Offering
assuming there is no other change made to the issued share capital of the Company between
the Latest Practicable Date and the Listing.
Assuming the Offer Size Adjustment Option
is not exercised
Assuming the Offer Size Adjustment Option
is exercised in full
Assuming the
Over-allotment Option is
not exercised
Assuming the
Over-allotment Option is
exercised in full
Assuming the
Over-allotment Option is
not exercised
Assuming the
Over-allotment Option is
exercised in full
%o ft h e
Offer Shares
%o ft h e
total issued
share capital
%o ft h e
Offer Shares
%o ft h e
total issued
share capital
%o ft h e
Offer Shares
%o ft h e
total issued
share capital
%o ft h e
Offer Shares
%o ft h e
total issued
share capital
50.00% 2.07% 43.48% 2.06% 45.45% 2.07% 39.52% 2.05%
Note:
(1) Each of the Cornerstone Investors has agreed in their respective Cornerstone Investment Agreements that the
Company, the Joint Sponsors and the Overall Coordinators shall have the right to, in their sole and absolute
discretion, adjust the allocation of the number of Offer Shares to be subscribed for by the relevant Cornerstone
Investor to ensure compliance with the Listing Rules, including the Cornerstone Placing Allocation Limit. The
Company, the Joint Sponsors and the Overall Coordinators will adjust the allocation of the number of Offer
Shares to be subscribed for by the Cornerstone Investors in proportion to their respective initial subscription
amounts set out in their respective Cornerstone Investment Agreements to ensure compliance with the
Cornerstone Placing Allocation Limit in the event that the final Offer Price is set at the mid-point of the
indicative Offer Price range, and will disclose the number of the Offer Shares finally allocated to each of the
Cornerstone Investors in the allotment results announcement of the Company to be published on or around
Monday, January 12, 2026.
CORNERSTONE INVESTORS
– 315 –


--- page 326 ---
Based on the Offer Price of HK$132.00 per Offer Share, being the low-end of the
indicative Offer Price range set out in this prospectus, the total number of Offer Shares to be
subscribed for by the Cornerstone Investors would be 14,457,400 H Shares
(1). The table below
reflects the shareholding percentage immediately after the completion of the Global Offering
assuming there is no other change made to the issued share capital of the Company between
the Latest Practicable Date and the Listing.
Assuming the Offer Size Adjustment Option
is not exercised
Assuming the Offer Size Adjustment Option
is exercised in full
Assuming the
Over-allotment Option is
not exercised
Assuming the
Over-allotment Option is
exercised in full
Assuming the
Over-allotment Option is
not exercised
Assuming the
Over-allotment Option is
exercised in full
%o ft h e
Offer Shares
%o ft h e
total issued
share capital
%o ft h e
Offer Shares
%o ft h e
total issued
share capital
%o ft h e
Offer Shares
%o ft h e
total issued
share capital
%o ft h e
Offer Shares
%o ft h e
total issued
share capital
50.00% 2.07% 43.48% 2.06% 45.45% 2.07% 39.52% 2.05%
Note:
(1) Each of the Cornerstone Investors has agreed in their respective Cornerstone Investment Agreements that the
Company, the Joint Sponsors and the Overall Coordinators shall have the right to, in their sole and absolute
discretion, adjust the allocation of the number of Offer Shares to be subscribed for by the relevant Cornerstone
Investor to ensure compliance with the Listing Rules, including the Cornerstone Placing Allocation Limit. The
Company, the Joint Sponsors and the Overall Coordinators will adjust the allocation of the number of Offer
Shares to be subscribed for by the Cornerstone Investors in proportion to their respective initial subscription
amounts set out in their respective Cornerstone Investment Agreements to ensure compliance with the
Cornerstone Placing Allocation Limit in the event that the final Offer Price is set at the low-end of the
indicative Offer Price range, and will disclose the number of the Offer Shares finally allocated to each of the
Cornerstone Investors in the allotment results announcement of the Company to be published on or around
Monday, January 12, 2026.
The Company believes that the Cornerstone Placing demonstrates the Cornerstone
Investors’ confidence in the Company and its business prospect, and that the Cornerstone
Placing will help raise the profile of the Company. The Company became acquainted with each
of the Cornerstone Investors in its ordinary course of operation through the Group’s business
network or through introduction by the Company’s business partners or the Underwriters in the
Global Offering.
The Cornerstone Placing will form part of the International Offering, and, save as
otherwise obtained consent from the Stock Exchange, the Cornerstone Investors (for
Cornerstone Investor who will subscribe for the Offer Shares through qualified domestic
institutional investor(s) (the “ QDII(s) ”), plus the QDII(s)), and their respective close
associates will not subscribe for any Offer Shares under the Global Offering (other than
pursuant to the Cornerstone Investment Agreements). The Offer Shares to be subscribed by the
Cornerstone Investors (for Cornerstone Investor who will subscribe for the Offer Shares
through QDII(s), plus the QDII(s)) will rank pari passu in all respects with the fully paid H
Shares in issue following the Global Offering and will be counted towards the public float of
CORNERSTONE INVESTORS
– 316 –


--- page 327 ---
the Company under Rule 8.08 of the Listing Rules. Immediately following the completion of
the Global Offering, the Cornerstone Investors or their close associates will not, by virtue of
their cornerstone investments, have any Board representation in the Company, and none of the
Cornerstone Investors and their close associates will become a substantial Shareholder. Other
than a guaranteed allocation of the relevant Offer Shares at the final Offer Price, the
Cornerstone Investors do not have any preferential rights under each of their respective
Cornerstone Investment Agreements, as compared with other public Shareholders. There are no
side arrangements or agreements between the Company and the Cornerstone Investors or any
benefit, direct or indirect, conferred on the Cornerstone Investors by virtue of or in relation to
the Listing, other than a guaranteed allocation of the relevant Offer Shares at the final Offer
Price, following the principles as set out in Chapter 4.15 of the Guide for New Listing
Applicants.
Among the Cornerstone Investors, DAMSIMF and Taikang Life are either existing
minority Shareholders or their respective close associates. The Stock Exchange has granted a
waiver from strict compliance with the requirements under Rule 10.04 and consent under
Paragraph 1C(2) of the Appendix F1 to the Listing Rules to permit H Shares in the International
Offering to be placed to certain existing minority Shareholders and/or their close associates.
For further details, see “Waivers and Exemption — Waiver in respect of Allocation of H Shares
to Existing Minority Shareholders and Their Close Associates.”
To the best knowledge and belief of the Company, (i) each of the Cornerstone Investors
(for Cornerstone Investor who will subscribe for the Offer Shares through QDII(s), plus the
QDII(s)) is an Independent Third Party; (ii) none of the Cornerstone Investors (for Cornerstone
Investor who will subscribe for the Offer Shares through QDII(s), plus the QDII(s)) is
accustomed to taking instructions from the Company, the Directors, chief executive, substantial
Shareholders, existing Shareholders or any of their respective subsidiaries or their respective
close associates in relation to the acquisition, disposal, voting or other disposition of the Offer
Shares; (iii) none of the subscription of the relevant Offer Shares by any of the Cornerstone
Investors (for Cornerstone Investor who will subscribe for the Offer Shares through QDII(s),
plus the QDII(s)) is financed by the Company, the Directors, chief executive, substantial
Shareholders, existing Shareholders or any of their respective subsidiaries or their respective
close associates; (iv) save for Wind Sabre, each Cornerstone Investor will be utilizing its
internal financial resources, financial resources of its shareholders or (in the case of
Cornerstone Investors which are funds or investment managers) the assets managed for its
investors as its source of funding for the subscription of the Offer Shares, and each Cornerstone
Investor has sufficient funds to settle its respective investment under the Cornerstone Placing;
and (v) each of the Cornerstone Investors has confirmed that all necessary approvals have been
obtained with respect to the Cornerstone Placing and that no specific approval from any stock
exchange (if relevant) is required for the relevant Cornerstone Placing. In addition, to the best
knowledge of the Company, save as otherwise disclosed, each of the Cornerstone Investors is
independent from each other and makes independent investment decisions.
CORNERSTONE INVESTORS
– 317 –


--- page 328 ---
The Cornerstone Investors have agreed to pay for the relevant Offer Shares that they have
subscribed for before dealings in the H Shares commence on the Stock Exchange. Some of the
Cornerstone Investors have agreed that, the Company, the Joint Sponsors and the Overall
Coordinators may in their sole discretion defer the delivery of all or part of the Offer Shares
it will subscribe for on a date later than the Listing Date. Such delayed delivery arrangement
is in place to facilitate the over-allocation in the International Offering. There will be no
delayed delivery if there is no over-allocation in the International Offering. Where delayed
delivery takes place, each of such Cornerstone Investors that may be affected by such delayed
delivery has agreed that it shall nevertheless pay for the relevant Offer Shares before the
Listing. Accordingly, there will be no deferred settlement of the Offer Shares to be subscribed
by the Cornerstone Investors.
Details of the actual number of Offer Shares to be allocated to the Cornerstone Investors
will be disclosed in the allotment results announcement of the Company to be published on or
around Monday, January 12, 2026.
To the best knowledge of the Company and the Overall Coordinators, and based on the
indicative interest of investment of the Cornerstone Investors and/or their close associates as
of the date of this prospectus, certain Cornerstone Investors and/or their close associates may
participate in the International Offering as placees and subscribe for further Offer Shares in the
Global Offering. The Company will seek the Stock Exchange’s consent and/or waiver to allow
the Cornerstone Investors and/or their close associates to participate in the International
Offering as placees pursuant to Chapter 4.15 of the Guide for New Listing Applicants. Whether
such Cornerstone Investors and/or their close associates will place orders in the International
Offering are uncertain and will be subject to the final investment decisions of such investors
and the terms and conditions of the Global Offering.
CORNERSTONE INVESTORS
– 318 –


--- page 329 ---
THE CORNERSTONE INVESTORS
The table below sets forth details of the Cornerstone Placing:
Assuming the Offer Size Adjustment Option is not exercised
Assuming the Offer Size Adjustment Option is
exercised in full
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is exercised in full
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is exercised in full
Cornerstone Investor
Subscription
amount (1)(2)
Number of
Offer
Shares (3)
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
(US$ in
millions)
Based on the Offer Price of HK$132.00 (the low-end of the indicative Offer Price range)
Y uanfeng Asset Management
and HTCI (in connection with
the Y uanfeng Asset
Management OTC Swaps) /H1118/H1118 15.10 890,000 3.08% 0.13% 2.68% 0.13% 2.80% 0.13% 2.43% 0.13%
CPE /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817.63 1,039,500 3.59% 0.15% 3.13% 0.15% 3.27% 0.15% 2.84% 0.15%
Shanghai Greenwoods and
HTCI (in connection with the
Greenwoods OTC Swaps) /H1118/H1118/H1118 24.31 1,432,700 4.95% 0.21% 4.31% 0.20% 4.50% 0.20% 3.92% 0.20%
Yunfeng Capital
New Alternative Limited /H1118/H1118/H1118 20.46 1,206,000 4.17% 0.17% 3.63% 0.17% 3.79% 0.17% 3.30% 0.17%
New Golden Future Limited /H1118 20.46 1,206,000 4.17% 0.17% 3.63% 0.17% 3.79% 0.17% 3.30% 0.17%
DAMSIMF /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820.46 1,206,000 4.17% 0.17% 3.63% 0.17% 3.79% 0.17% 3.30% 0.17%
CloudAlpha Capital /H1118/H1118/H1118/H1118/H1118/H1118/H111816.37 964,800 3.34% 0.14% 2.90% 0.14% 3.03% 0.14% 2.64% 0.14%
3W Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188.18 482,400 1.67% 0.07% 1.45% 0.07% 1.52% 0.07% 1.32% 0.07%
CORNERSTONE INVESTORS
– 319 –


--- page 330 ---
Assuming the Offer Size Adjustment Option is not exercised
Assuming the Offer Size Adjustment Option is
exercised in full
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is exercised in full
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is exercised in full
Cornerstone Investor
Subscription
amount (1)(2)
Number of
Offer
Shares (3)
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
(US$ in
millions)
HUAQIN TELECOM
HONG KONG LIMITED /H1118/H1118/H1118 24.55 1,447,200 5.00% 0.21% 4.35% 0.21% 4.55% 0.21% 3.96% 0.21%
Metazone /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816.37 964,800 3.34% 0.14% 2.90% 0.14% 3.03% 0.14% 2.64% 0.14%
Sky Royal Trading Limited /H1118/H1118/H1118 8.18 482,400 1.67% 0.07% 1.45% 0.07% 1.52% 0.07% 1.32% 0.07%
Green Better /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188.18 482,400 1.67% 0.07% 1.45% 0.07% 1.52% 0.07% 1.32% 0.07%
New China Asset Management /H1118 8.18 482,400 1.67% 0.07% 1.45% 0.07% 1.52% 0.07% 1.32% 0.07%
Taikang Life /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188.18 482,400 1.67% 0.07% 1.45% 0.07% 1.52% 0.07% 1.32% 0.07%
Summit Ridge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188.18 482,400 1.67% 0.07% 1.45% 0.07% 1.52% 0.07% 1.32% 0.07%
ICBC Wealth /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188.18 482,400 1.67% 0.07% 1.45% 0.07% 1.52% 0.07% 1.32% 0.07%
GBAD Fund Management /H1118/H1118/H1118/H1118 8.18 482,400 1.67% 0.07% 1.45% 0.07% 1.52% 0.07% 1.32% 0.07%
Wind Sabre /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.09 241,200 0.83% 0.03% 0.73% 0.03% 0.76% 0.03% 0.66% 0.03%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118245.26 14,457,400 50.00% 2.07% 43.48% 2.06% 45.45% 2.07% 39.52% 2.05%
Based on the Offer Price of HK$147.00 (the mid-point of the indicative Offer Price range)
Y uanfeng Asset Management
and HTCI (in connection with
the Y uanfeng Asset
Management OTC Swaps) /H1118/H1118 16.81 890,000 3.08% 0.13% 2.68% 0.13% 2.80% 0.13% 2.43% 0.13%
CPE /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819.64 1,039,500 3.59% 0.15% 3.13% 0.15% 3.27% 0.15% 2.84% 0.15%
CORNERSTONE INVESTORS
– 320 –


--- page 331 ---
Assuming the Offer Size Adjustment Option is not exercised
Assuming the Offer Size Adjustment Option is
exercised in full
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is exercised in full
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is exercised in full
Cornerstone Investor
Subscription
amount (1)(2)
Number of
Offer
Shares (3)
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
(US$ in
millions)
Shanghai Greenwoods and
HTCI (in connection with the
Greenwoods OTC Swaps) /H1118/H1118/H1118 27.07 1,432,700 4.95% 0.21% 4.31% 0.20% 4.50% 0.20% 3.92% 0.20%
Yunfeng Capital
New Alternative Limited /H1118/H1118/H1118 22.78 1,206,000 4.17% 0.17% 3.63% 0.17% 3.79% 0.17% 3.30% 0.17%
New Golden Future Limited /H1118 22.78 1,206,000 4.17% 0.17% 3.63% 0.17% 3.79% 0.17% 3.30% 0.17%
DAMSIMF /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822.78 1,206,000 4.17% 0.17% 3.63% 0.17% 3.79% 0.17% 3.30% 0.17%
CloudAlpha Capital /H1118/H1118/H1118/H1118/H1118/H1118/H111818.23 964,800 3.34% 0.14% 2.90% 0.14% 3.03% 0.14% 2.64% 0.14%
3W Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189.11 482,400 1.67% 0.07% 1.45% 0.07% 1.52% 0.07% 1.32% 0.07%
HUAQIN TELECOM
HONG KONG LIMITED /H1118/H1118/H1118 27.34 1,447,200 5.00% 0.21% 4.35% 0.21% 4.55% 0.21% 3.96% 0.21%
Metazone /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818.23 964,800 3.34% 0.14% 2.90% 0.14% 3.03% 0.14% 2.64% 0.14%
Sky Royal Trading Limited /H1118/H1118/H1118 9.11 482,400 1.67% 0.07% 1.45% 0.07% 1.52% 0.07% 1.32% 0.07%
Green Better /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189.11 482,400 1.67% 0.07% 1.45% 0.07% 1.52% 0.07% 1.32% 0.07%
New China Asset Management /H1118 9.11 482,400 1.67% 0.07% 1.45% 0.07% 1.52% 0.07% 1.32% 0.07%
Taikang Life /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189.11 482,400 1.67% 0.07% 1.45% 0.07% 1.52% 0.07% 1.32% 0.07%
Summit Ridge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189.11 482,400 1.67% 0.07% 1.45% 0.07% 1.52% 0.07% 1.32% 0.07%
ICBC Wealth /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189.11 482,400 1.67% 0.07% 1.45% 0.07% 1.52% 0.07% 1.32% 0.07%
CORNERSTONE INVESTORS
– 321 –


--- page 332 ---
Assuming the Offer Size Adjustment Option is not exercised
Assuming the Offer Size Adjustment Option is
exercised in full
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is exercised in full
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is exercised in full
Cornerstone Investor
Subscription
amount (1)(2)
Number of
Offer
Shares (3)
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
(US$ in
millions)
GBAD Fund Management /H1118/H1118/H1118/H1118 9.11 482,400 1.67% 0.07% 1.45% 0.07% 1.52% 0.07% 1.32% 0.07%
Wind Sabre /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.56 241,200 0.83% 0.03% 0.73% 0.03% 0.76% 0.03% 0.66% 0.03%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118273.14 14,457,400 50.00% 2.07% 43.48% 2.06% 45.45% 2.07% 39.52% 2.05%
Based on the Offer Price of HK$162.00 (the high-end of the indicative Offer Price range)
Y uanfeng Asset Management
and HTCI (in connection with
the Y uanfeng Asset
Management OTC Swaps) /H1118/H1118 18.45 886,100 3.06% 0.13% 2.66% 0.13% 2.79% 0.13% 2.42% 0.13%
CPE /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821.55 1,035,000 3.58% 0.15% 3.11% 0.15% 3.25% 0.15% 2.83% 0.15%
Shanghai Greenwoods and
HTCI (in connection with the
Greenwoods OTC Swaps) /H1118/H1118/H1118 29.70 1,426,500 4.93% 0.20% 4.29% 0.20% 4.48% 0.20% 3.90% 0.20%
Yunfeng Capital
New Alternative Limited /H1118/H1118/H1118 25.00 1,200,700 4.15% 0.17% 3.61% 0.17% 3.77% 0.17% 3.28% 0.17%
New Golden Future Limited /H1118 25.00 1,200,700 4.15% 0.17% 3.61% 0.17% 3.77% 0.17% 3.28% 0.17%
DAMSIMF /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825.00 1,200,700 4.15% 0.17% 3.61% 0.17% 3.77% 0.17% 3.28% 0.17%
CloudAlpha Capital /H1118/H1118/H1118/H1118/H1118/H1118/H111820.00 960,600 3.32% 0.14% 2.89% 0.14% 3.02% 0.14% 2.63% 0.14%
3W Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810.00 480,300 1.66% 0.07% 1.44% 0.07% 1.51% 0.07% 1.31% 0.07%
CORNERSTONE INVESTORS
– 322 –


--- page 333 ---
Assuming the Offer Size Adjustment Option is not exercised
Assuming the Offer Size Adjustment Option is
exercised in full
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is exercised in full
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is exercised in full
Cornerstone Investor
Subscription
amount (1)(2)
Number of
Offer
Shares (3)
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
(US$ in
millions)
HUAQIN TELECOM
HONG KONG LIMITED /H1118/H1118/H1118 30.00 1,440,900 4.98% 0.21% 4.33% 0.21% 4.53% 0.21% 3.94% 0.20%
Metazone /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820.00 960,600 3.32% 0.14% 2.89% 0.14% 3.02% 0.14% 2.63% 0.14%
Sky Royal Trading Limited /H1118/H1118/H1118 10.00 480,300 1.66% 0.07% 1.44% 0.07% 1.51% 0.07% 1.31% 0.07%
Green Better /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810.00 480,300 1.66% 0.07% 1.44% 0.07% 1.51% 0.07% 1.31% 0.07%
New China Asset Management /H1118 10.00 480,300 1.66% 0.07% 1.44% 0.07% 1.51% 0.07% 1.31% 0.07%
Taikang Life /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810.00 480,300 1.66% 0.07% 1.44% 0.07% 1.51% 0.07% 1.31% 0.07%
Summit Ridge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810.00 480,300 1.66% 0.07% 1.44% 0.07% 1.51% 0.07% 1.31% 0.07%
ICBC Wealth /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810.00 480,300 1.66% 0.07% 1.44% 0.07% 1.51% 0.07% 1.31% 0.07%
GBAD Fund Management /H1118/H1118/H1118/H111810.00 480,300 1.66% 0.07% 1.44% 0.07% 1.51% 0.07% 1.31% 0.07%
Wind Sabre /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185.00 240,100 0.83% 0.03% 0.72% 0.03% 0.75% 0.03% 0.66% 0.03%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118299.70 14,394,300 49.78% 2.07% 43.29% 2.05% 45.25% 2.06% 39.35% 2.04%
Notes:
(1) Exclusive of brokerage, the SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction levy, and to be converted to Hong Kong dol lars based on the exchange
rate as disclosed in this prospectus.
CORNERSTONE INVESTORS
– 323 –


--- page 334 ---
(2) Each of the Cornerstone Investors has agreed in their respective Cornerstone Investment Agreements that the
Company, the Joint Sponsors and the Overall Coordinators shall have the right to, in their sole and absolute
discretion, adjust the allocation of the number of Offer Shares to be subscribed for by the relevant Cornerstone
Investor to ensure compliance with the Listing Rules, including the Cornerstone Placing Allocation Limit. The
Company, the Joint Sponsors and the Overall Coordinators will adjust the allocation of the number of Offer
Shares to be subscribed for by the Cornerstone Investors in proportion to their respective initial subscription
amounts set out in their respective Cornerstone Investment Agreements where necessary based on the final
Offer Price and will disclose the number of the Offer Shares finally allocated to each of the Cornerstone
Investors in the allotment results announcement of the Company to be published on or around Monday, January
12, 2026.
(3) Rounded down to the nearest whole board lot of 100 H Shares.
The information about the Cornerstone Investors sets forth below has been provided by
the Cornerstone Investors in connection with the Cornerstone Placing.
Yuanfeng Asset Management and HTCI (in connection with the Yuanfeng Asset
Management OTC Swaps)
Huatai Capital Investment Limited (“ HTCI ”) and Huatai Securities Company Limited
(“HTSC ”) will enter into a series of cross border delta-one OTC swap transactions
(collectively, the “ Yuanfeng Asset Management OTC Swaps ”) with each other and their
ultimate client (the “ HTCI Ultimate Client (Yuanfeng Asset Management) ”), pursuant to
which HTCI will hold the Offer Shares on a non-discretionary basis to hedge the Y uanfeng
Asset Management OTC Swaps while the economic risks and returns of the underlying Offer
Shares are passed to the HTCI Ultimate Client (Y uanfeng Asset Management), subject to
customary fees and commissions. The Y uanfeng Asset Management OTC Swaps will be fully
funded by the HTCI Ultimate Client (Y uanfeng Asset Management). During the terms of the
Y uanfeng Asset Management OTC Swaps, all economic returns of the Offer Shares subscribed
by HTCI will be passed to the HTCI Ultimate Client (Y uanfeng Asset Management) and all
economic loss shall be borne by the HTCI Ultimate Client (Y uanfeng Asset Management)
through the Y uanfeng Asset Management OTC Swaps, and HTCI will not take part in any
economic return or bear any economic loss in relation to the Offer Shares. The Y uanfeng Asset
Management OTC Swaps are linked to the Offer Shares and the HTCI Ultimate Client
(Y uanfeng Asset Management) may, after expiration of the lock-up period beginning from the
date of the cornerstone agreement entered into among HTCI, the Company, the Joint Sponsors
and the Overall Coordinators, and ending on the date which is six months from the Listing
Date, request to terminate the Y uanfeng Asset Management OTC Swaps at their own
discretions, upon which HTCI may dispose of the Offer Shares on the secondary market and
the Huatai TRS Ultimate Client (Y uanfeng Asset Management) will receive a final settlement
amount of the Y uanfeng Asset Management OTC Swaps in cash in accordance with the terms
and conditions of the Y uanfeng Asset Management OTC Swaps. Despite that HTCI will hold
the legal title of the Offer Shares by itself, it will not exercise the voting rights attaching to the
relevant Offer Shares during the terms of the Y uanfeng Asset Management OTC Swaps
according to its internal policy. To the best of HTCI’s knowledge after having made all
reasonable inquiries, the HTCI Ultimate Client (Y uanfeng Asset Management) is an
independent third party of (i) the Company, (ii) HTCI, (iii) the Underwriters, and (iv) the
CORNERSTONE INVESTORS
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companies which are members of the same group of Huatai Financial Holdings (Hong Kong)
Limited (“ Huatai ”), and no single ultimate beneficial owner holds 30% or more interests in the
HTCI Ultimate Client (Y uanfeng Asset Management).
Both HTCI and Huatai, one of the Joint Sponsors, Overall Coordinators and Underwriters
of the Global Offering, are indirect wholly-owned subsidiaries of HTSC, the A shares of which
are listed on the Shanghai Stock Exchange (stock code: 601688), the H shares of which are
listed on the Stock Exchange (stock code: 6886), and the global depositary receipts of which
are listed on the London Stock Exchange (LON: HTSC). Accordingly, HTCI is a connected
client (as defined under Appendix F1 to the Listing Rules) of Huatai, holding securities on a
non-discretionary basis on behalf of independent third parties. The Company has applied to the
Stock Exchange for, and the Stock Exchange has granted, its consent under paragraph 1C(1)
of Appendix F1 to the Listing Rules to permit us to allocate the Offer Shares to HTCI. See
“Waivers and Exemption — Consent in respect of the Proposed Subscription of H Shares by
a Cornerstone Investor Who Is a Connected Client.”
The HTCI Ultimate Client (Y uanfeng Asset Management) is a domestic private fund
managed by Beijing Y uanfeng Asset Management L.L.P . (၍ଣΥྫΆุ(Ϟ
Υྫ)) (“ Yuanfeng Asset Management ”) in its capacity as fund manager on a discretionary
basis. Established in 2018, Y uanfeng Asset Management is a private securities investment fund
manager registered with the Asset Management Association of China (AMAC) and holds
investment advisory qualifications. Y uanfeng Asset Management conducts long-term research
on sectors including consumer goods, TMT, industrials, healthcare and cyclical industries, and
maintains a comprehensive and in-depth understanding of the upstream, midstream, and
downstream segments across these industries. Y uanfeng Asset Management leverages
professional asset management and is dedicated to delivering substantial returns for investors.
As confirmed by Y uanfeng Asset Management, the subscription of the Offer Shares as
cornerstone investor will be made by Y uanfeng Asset Management in its capacity as the fund
manager of the domestic private fund through total return swap mechanism.
CPE
CPE Greater China Enterprises Growth Fund and CPE Growth Fund #1 (collectively, the
“CPE Funds ”) are exempted companies incorporated with limited liability under the laws of
the Cayman Islands for an unlimited duration. The CPE Funds are managed by China Pinnacle
Equity Management Limited (“ CPE”), a company incorporated with limited liability in August
2017 in Hong Kong and is licensed to conduct Type 4 (Advising on Securities) and Type 9
(Asset Management) regulated activities under Part V of the SFO with CE number BKY108,
on an investment management discretionary basis. It is principally engaged in fund
management and the provision of investment advisory services to professional investors as
defined under the SFO, including corporations, institutions and high net worth individual
investors. CPE holds 100 management shares in the CPE Funds and controls their entire voting
rights. Mr. Ni Fei, director of CPE, indirectly holds 30% shares interest in CPE. No single
ultimate beneficial owner holds 30% or more interest in each of the CPE Funds.
CORNERSTONE INVESTORS
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Shanghai Greenwoods and HTCI (in connection with the Greenwoods OTC Swaps)
HTCI and HTSC will enter into a series of cross border delta-one OTC swap transactions
(collectively, the “ Greenwoods OTC Swaps ”) with each other and their ultimate clients (the
“HTCI Ultimate Clients (Greenwoods) ”), pursuant to which HTCI will hold the Offer Shares
on a non-discretionary basis to hedge the Greenwoods OTC Swaps while the economic risks
and returns of the underlying Offer Shares are passed to the HTCI Ultimate Clients
(Greenwoods), subject to customary fees and commissions. The Greenwoods OTC Swaps will
be fully funded by the HTCI Ultimate Clients (Greenwoods). During the terms of the
Greenwoods OTC Swaps, all economic returns of the Offer Shares subscribed by HTCI will be
passed to the HTCI Ultimate Clients (Greenwoods) and all economic loss shall be borne by the
HTCI Ultimate Clients (Greenwoods) through the Greenwoods OTC Swaps, and HTCI will not
take part in any economic return or bear any economic loss in relation to the Offer Shares. The
Greenwoods OTC Swaps are linked to the Offer Shares and the HTCI Ultimate Clients
(Greenwoods) may, after expiration of the lock-up period beginning from the date of the
cornerstone agreement entered into among HTCI, the Company, the Joint Sponsors and the
Overall Coordinators, and ending on the date which is six months from the Listing Date,
request to terminate the Greenwoods OTC Swaps at their own discretions, upon which HTCI
may dispose of the Offer Shares on the secondary market and the Huatai TRS Ultimate Clients
(Greenwoods) will receive a final settlement amount of the Greenwoods OTC Swaps in cash
in accordance with the terms and conditions of the Greenwoods OTC Swaps. Despite that HTCI
will hold the legal title of the Offer Shares by itself, it will not exercise the voting rights
attaching to the relevant Offer Shares during the terms of the Greenwoods OTC Swaps
according to its internal policy. To the best of HTCI’s knowledge after having made all
reasonable inquiries, each of the HTCI Ultimate Clients (Greenwoods) is an independent third
party of (i) the Company, (ii) HTCI, (iii) the Underwriters, and (iv) the companies which are
members of the same group of Huatai, and no single ultimate beneficial owner holds 30% or
more interests in each of the HTCI Ultimate Clients (Greenwoods).
Both HTCI and Huatai, one of the Joint Sponsors, Overall Coordinators and Underwriters
of the Global Offering, are indirect wholly-owned subsidiaries of HTSC, the A shares of which
are listed on the Shanghai Stock Exchange (stock code: 601688), the H shares of which are
listed on the Stock Exchange (stock code: 6886), and the global depositary receipts of which
are listed on the London Stock Exchange (LON: HTSC). HTCI is a connected client (as defined
under Appendix F1 to the Listing Rules) of Huatai, holding securities on a non-discretionary
basis on behalf of independent third parties. The Company has applied to the Stock Exchange
for, and the Stock Exchange has granted, its consent under paragraph 1C(1) of Appendix F1 to
the Listing Rules to permit us to allocate the Offer Shares to HTCI. See “Waivers and
Exemption — Consent in respect of the Proposed Subscription of H Shares by a Cornerstone
Investor Who Is a Connected Client.”
The HTCI Ultimate Clients (Greenwoods) are certain domestic private funds (including
a total of no more than nine funds) managed by Shanghai Greenwoods Asset Management Co.,
Ltd. (ʮ̡)( “ Shanghai Greenwoods ”) in its capacity as fund manager
on a discretionary basis. Shanghai Greenwoods is a private fund management company with
the registration under the Asset Management Association of China (AMAC). Shanghai
CORNERSTONE INVESTORS
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Greenwoods is one of the largest and earliest PRC domestic asset managers mainly specializing
in investing into companies in the Greater China region. Shanghai Greenwoods focuses on
fundamental research, value investments, and local due diligence. Investors of funds managed
by Shanghai Greenwoods include institutional investors and high-net-worth individuals
professional investors. Mr. Jiang Jinzhi is the chairman and an ultimate beneficial owner of
Shanghai Greenwoods. No other shareholder holds 30% or more interest in Shanghai
Greenwoods. As confirmed by Shanghai Greenwoods, the subscription of the Offer Shares as
cornerstone investor will be made by Shanghai Greenwoods in its capacity as the fund manager
of domestic private funds through total return swap mechanism.
Yunfeng Capital
New Alternative Limited
New Alternative Limited is a limited liability company incorporated in the British Virgin
Islands and is wholly-owned by Y unfeng Capital Limited, a wholly owned subsidiary of
Y unfeng Investments Limited (“ Yunfeng Capital ”). Y unfeng Capital is majority-owned and
controlled by Mr. Y u Feng, who is an Independent Third Party. The other minority shareholder
is an Independent Third Party.
New Golden Future Limited
New Golden Future Limited is a limited liability company incorporated in the BVI, which
is wholly owned by Y unfeng Capital. Y unfeng Capital is majority-owned and controlled by Mr.
Y u Feng, who is an Independent Third Party. The other minority stakeholder is an Independent
Third Party.
Mr. Y u Feng is the co-founder and chairman of Y unfeng Capital, and the chairman and
non-executive director of Y unfeng Financial Group Limited, a company listed on the Stock
Exchange (stock code: 376).
DAMSIMF
Dymon Asia Multi-Strategy Investment Master Fund (“ DAMSIMF ”) is an investment
fund established in the Cayman Islands. The investors in DAMSIMF are Dymon Asia
Multi-Strategy Investment Fund and Dymon Asia Multi-Strategy Investment (US) Fund.
DAMSIMF is a multi-manager, multi-asset class fund which seeks to generate absolute
consistent uncorrelated returns with minimal volatility. Asset classes traded are: FX, Fixed
Income/Rates, Equities, Credit and Commodities. DAMSIMF is managed by Dymon Asia
Capital (Singapore) Pte. Ltd. (“ DACS ”). DACS is a wholly-owned subsidiary of and directly
controlled by Dymon Asia Capital Ltd, whose shareholders Danny Y ong and Keith Tan each
holds more than 10% interests therein, with Danny Y ong having the controlling stake of Dymon
Asia Capital Ltd. DACS is headquartered in Singapore with an affiliate in Hong Kong that is
CORNERSTONE INVESTORS
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licensed by the SFC to carry out Type 9 (asset management) and Type 1 (dealing in securities)
regulated activities. Save for an Australian sovereign wealth fund who holds over 30% interest
in DAMSIMF, no other single ultimate beneficial owner holds 30% or more interest in
DAMSIMF.
CloudAlpha Capital
CloudAlpha Capital Management Limited (“ CloudAlpha Capital ”) was founded in 2014
and is now a global-leading hedge fund manager that focuses on investment in technologies.
CloudAlpha Capital is headquartered in Hong Kong, with teams also spread across Shenzhen,
Shanghai, Taipei, Hsinchu, and Tokyo. CloudAlpha Capital currently manages equity long-
short hedge funds with total assets under management of approximately US$2 billion.
CloudAlpha Capital is fully controlled by Y ang Jin, Wang Y en Kang and Y an Peide, all of
whom are Independent Third Parties. CloudAlpha Capital acts as the investment manager to
two funds managed by it on a discretionary basis. There is no single investor holding 30% or
more interests in the funds.
3W Fund
3W Fund Management Limited (“ 3W Fund ”) is incorporated in Hong Kong with limited
liability and licensed by the SFC to carry out Type 9 (asset management) regulated activity. 3W
Fund, which is ultimately wholly owned by Mr. Weiwei Wu, an Independent Third Party, has
agreed to procure 3W Global Fund, over which 3W Fund has discretionary investment
management power, to subscribe for such number of the Offer Shares. 3W Global Fund pursues
to maximize absolute return and seek long-term capital growth primarily through fundamental
investment principle with value approach. No single investor holds 30% or more interests in
3W Global Fund.
HUAQIN TELECOM HONG KONG LIMITED
HUAQIN TELECOM HONG KONG LIMITED (ʮ̡), registered and
established in Hong Kong, China in June 2006, is a wholly-owned subsidiary of Huaqin
Technology Co., Ltd. (“ Huaqin Technology ”, stock code: 603296.SH), serving as the overseas
holding platform of Huaqin Technology in Hong Kong. Huaqin Technology is a globally
leading intelligent product company with over 20 years of experience in the intelligent product
sector. Huaqin Technology was listed on the main board of the Shanghai Stock Exchange in
August 2023.
Metazone
Metazone Link (HK) Limited (“ Metazone ”) is a wholly owned subsidiary of TCL
Industries Holdings Co., Ltd. TCL Industries Holdings Co., Ltd is a company established under
the laws of the PRC, and it is one of the major home appliance and consumer electronics
conglomerates with a global presence. Mr. Li Dongsheng is the Chairman and the ultimate
beneficial owner of TCL Industries Holdings Co., Ltd.
CORNERSTONE INVESTORS
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Sky Royal Trading Limited
Sky Royal Trading Limited is a private company organized and existing under the laws
of Hong Kong, which is controlled by Mr. Chen Mingyong. Mr. Chen Mingyong is the founder
and chief executive officer of OPPO, a leading consumer electronics manufacturer in the PRC.
Green Better
Green Better Limited (“ Green Better ”) is an investment company incorporated in the
British Virgin Islands. Green Better is a wholly-owned subsidiary of Xiaomi Corporation, a
company listed on the Stock Exchange (stock code: 1810). Xiaomi Corporation is an
investment holding company principally engaged in the research, development and sales of
smartphones, Internet of things and lifestyle products, the provision of Internet services, the
development, manufacturing and sales of smart electric vehicles and investment business in
China and other countries or regions.
New China Asset Management
New China Asset Management (Hong Kong) Limited (“ New China Asset
Management ”), in its capacity as investment manager acting as agent on behalf of its
discretionary accounts owned by New China Life Insurance Company Ltd. (΅
ʮ̡,“ New China Life Insurance ”), a company dually listed on the Hong Kong Stock
Exchange (stock code: 1336.HK) and the Shanghai Stock Exchange (stock code: 601336.SH),
has agreed to subscribe for the H Shares of the Company. New China Asset Management was
incorporated in Hong Kong with limited liability. New China Asset Management is licensed
with the Hong Kong Securities and Futures Commission to carry on business in Type 4
(advising on securities) and Type 9 (asset management) regulated activities under the
Securities and Futures Ordinance (Cap. 571). New China Asset Management focuses on
investments in equity securities, fixed income securities, as well as in a wide range of
underlying investment funds. New China Asset Management is held as to 99.4% by New China
Life Insurance.
Taikang Life
Taikang Life Insurance Co., Ltd (“ Taikang Life ”), a company incorporated in China, is
a wholly owned subsidiary of Taikang Insurance Group Inc. There is no shareholder holding
30% or more in Taikang Insurance Group Inc. Taikang Life provides a full range of personal
security and investment and wealth management products and services for individuals and
families. The products on offer correspond to the different requirements of customers in terms
of market segments such as the children and teenagers, females and high-income population
groups. They also meet multidimensional demands regarding health care and accident cover,
pensions and wealth management, among others. Taikang Insurance Group Inc. is an insurance
and financial service conglomerate focused on insurance, asset management and health and
elderly care as main businesses. The Beijing-headquartered company consists of several
subsidiaries including Taikang Life, Taikang AMC, Taikang Pension, Taikang Healthcare,
CORNERSTONE INVESTORS
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Taikang Health, and TK.CN. Its product offering covers life insurance, internet-based financial
insurance, enterprise annuity, asset management, health and elderly care, health management
and commercial real estate, among others. Taikang Life will be utilizing its internal financial
resources as its source of funding for the subscription of the Offer Shares on behalf of itself.
Summit Ridge
Summit Ridge Capital SP (“ Summit Ridge ”) is a segregated portfolio (the “ SP”) of S
Harmony Investment Fund SPC (the “ SPC”), a segregated portfolio company incorporated in
the Cayman Islands. The SPC operates segregated portfolios whose assets and liabilities are
statutorily segregated from each other and from the general assets and liabilities of the SPC.
Other than Zhiwei Wang, an Independent Third Party, there is no single ultimate beneficial
owner holding 30% or more interests in Summit Ridge.
S Harmony Asset Management Limited (“ S Harmony ”) acts as the discretionary
investment manager to the SPC’s segregated portfolios (including Summit Ridge) pursuant to
investment management agreements. S Harmony holds 100% of the management shares of the
SPC.
S Harmony is incorporated in Hong Kong and is licensed by the Securities and Futures
Commission of Hong Kong to carry out Type 4 (Advising on Securities) and Type 9 (Asset
Management) regulated activities. The ultimate controlling shareholder of S Harmony is Mr.
Ding Zhijun (ࠏ.)
ICBC Wealth
ICBC Wealth Management Co., Ltd. (“ ICBC Wealth ”) was established in May 2019 in
Beijing, with a registered capital of RMB16 billion. It is a wholly-owned subsidiary of
Industrial and Commercial Bank of China Limited, a company listed on the Shanghai Stock
Exchange (stock code: 601398) and the Stock Exchange (stock code: 1398). The business
scope of ICBC Wealth is public issuance of wealth management products to the general public,
investment and management of entrusted assets for investors; non-public issuance of wealth
management products to qualified investors, investment and management of entrusted assets
for investors; wealth management advisory and consulting services; and other businesses as
approved by the banking regulatory authority under the State Council. ICBC Wealth invests on
behalf of 14 wealth management products (the “ Wealth Management Products ”) managed by
it on a discretionary basis with total assets under management (AUM) amounting to
approximately RMB56 billion. The Offer Shares to be subscribed by ICBC Wealth constitute
part of the underlying assets of the Wealth Management Products. There is no single ultimate
beneficial owner holding 30% or more interests in the Wealth Management Products.
CORNERSTONE INVESTORS
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GBAD Fund Management
Mega Prime Development Limited (“ Mega Prime ”) is a company incorporated in the
British Virgin Islands with limited liability and a wholly-owned subsidiary of GBA Homeland
Limited, which in turn is wholly owned by Greater Bay Area Homeland Investments Limited
(“GBAHIL ”). GBAHIL is a company incorporated in Hong Kong with limited liability and is
jointly owned by ten shareholders, each of which holds less than 13% equity interest therein.
GBAHIL’s business encompasses investment, investment holding and the establishment
or management of private equity funds through its subsidiaries to grasp the historical
opportunities of the development of Guangdong-Hong Kong-Macao Greater Bay Area, and the
construction of an international innovation and technology hub, focusing on technological
innovation, industrial upgrading, quality of life, smart city and all other related industries.
Mega Prime subscribes for the Offer Shares through the account managed on a
discretionary basis by Greater Bay Area Development Fund Management Limited (࢝
ʮ̡,“ GBAD Fund Management ”), a company wholly owned by GBAHIL and
licensed under the SFO to conduct type 1 (dealing in securities), type 4 (advising on securities)
and type 9 (asset management) regulated activities in Hong Kong.
Wind Sabre
Wind Sabre Fund SPC on behalf of Wind Sabre Opportunities Fund SP (“ Wind Sabre ”)
is a fund established in the Cayman Islands holding securities on a discretionary basis on behalf
of its clients who are Independent Third Parties. Wind Sabre Fund SPC is a Segregated
Portfolio Company incorporated in the Cayman Islands with limited liabilities and is an
independent third party, and Wind Sabre Opportunities Fund SP is a segregated portfolio of
Wind Sabre Fund SPC. Wind Sabre Fund SPC is controlled by Wind Sabre Capital Limited as
the investment manager, which is a company incorporated in Hong Kong and licensed to carry
out type 9 (asset management) regulated activities under the SFO in Hong Kong by the SFC.
Well Smart Developments Limited, which is wholly owned by Chow Tai Fook (Nominee)
Limited, an Independent Third Party, is the only investor who holds 30% or more interest in
the fund. No single ultimate beneficial owner holds 30% or more interest in Chow Tai Fook
(Nominee) Limited.
Wind Sabre may obtain external financing from a prime broker to finance its subscription
of H Shares. The loan(s), if obtained, will be on normal commercial terms after arm’s length
negotiations. The H Shares to be subscribed for by Wind Sabre will not be charged to such
prime broker as security for such loan(s).
CLOSING CONDITIONS
The obligation of each Cornerstone Investor or each QDII (as applicable) to subscribe for
the Offer Shares under the respective Cornerstone Investment Agreement is subject to, among
other things, the following closing conditions:
CORNERSTONE INVESTORS
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(i) the Underwriting Agreements for the Hong Kong Public Offering and the
International Offering being entered into and having become effective and
unconditional (in accordance with their respective original terms or as subsequently
waived or varied by agreement of the parties thereto) by no later than the time and
date as specified in the Underwriting Agreements, and neither of the aforesaid
Underwriting Agreements having been terminated;
(ii) the Offer Price having been agreed upon between the Company and the Overall
Coordinators (for themselves and on behalf of the Underwriters);
(iii) the Stock Exchange having granted the approval for the listing of, and permission
to deal in, the H Shares (including the H Shares to be subscribed for by the
Cornerstone Investors) as well as other applicable waivers and approvals, and such
approval, permission or waiver having not been revoked prior to the commencement
of dealings in the H Shares on the Stock Exchange;
(iv) no laws shall have been enacted or promulgated by any governmental authorities
which prohibits the consummation of the transactions contemplated in the Global
Offering or in the respective Cornerstone Investment Agreements, and there shall be
no orders or injunctions from a court of competent jurisdiction in effect precluding
or prohibiting consummation of such transactions; and
(v) the respective agreements, representations, warranties, undertakings, confirmations
and acknowledgements of the relevant Cornerstone Investor under the respective
Cornerstone Investment Agreement are accurate and true in all respects and not
misleading and that there is no breach of the Cornerstone Investment Agreement on
the part of the relevant Cornerstone Investor.
RESTRICTIONS ON THE CORNERSTONE INVESTORS
Each of the Cornerstone Investors has agreed that it will not, whether directly or
indirectly, at any time during the period of six months from (and inclusive of) the Listing Date
(the “ Lock-up Period ”), dispose of, in any way, any of the Offer Shares or any interest in any
company or entity holding such Offer Shares that they have purchased pursuant to the relevant
Cornerstone Investment Agreement, save for certain limited circumstances, such as transfers to
any of its wholly-owned subsidiaries who will be bound by the same obligations of such
Cornerstone Investor, including the Lock-up Period restriction.
CORNERSTONE INVESTORS
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OVERVIEW
The Board consists of nine Directors, comprising three executive Directors, one
non-executive Director and five independent non-executive Directors. The Directors are
appointed for a term of three years and are eligible for re-election upon expiry of their term
of office. The independent non-executive Directors shall not hold office for more than six
consecutive years pursuant to the relevant PRC laws and regulations.
DIRECTORS
The following table sets forth the information about the Directors:
Name Age Position
Time of
joining the
Group
Date of
appointment
as a Director Roles and responsibilities
Mr. Zhu Yiming
(׼)H1118/H1118/H1118/H1118/H1118
53 Executive Director
and chairman of
the Board
April 2005 April 6, 2005 Overall strategic planning,
business development and
enterprise management of
the Group
Mr. He Wei
(Оሊ) /H1118/H1118/H1118/H1118/H1118/H1118
58 Executive Director,
deputy chairman
of the Board and
general manager
October 2009 June 10, 2021 Strategic planning and
operation management of
the Group
Mr. Hu Hong
(ݳߡ)H1118/H1118/H1118/H1118/H1118/H1118
43 Executive Director
and deputy
general manager
July 2007 December 16,
2022
Strategic planning and
operation management of
the Group
Ms. Wen Tian
(ܫ)H1118/H1118/H1118/H1118/H1118/H1118
31 Non-executive
Director
March 2020 June 10, 2025 Providing advice on the
operation and
management of the Group
Mr. Zhou Haitao
(մऎᏹ) /H1118/H1118/H1118/H1118/H1118
67 Independent
non-executive
Director
December
2024
December 16,
2024
Supervising and providing
independent opinion and
judgment to the Board
Dr. Qian He
(፺ᚲ) /H1118/H1118/H1118/H1118/H1118/H1118
62 Independent
non-executive
Director
December
2021
December 17,
2021
Supervising and providing
independent opinion and
judgment to the Board
Ms. Y eung Siuman
Shirley
(เʃත) /H1118/H1118/H1118/H1118/H1118
62 Independent
non-executive
Director
December
2024
December 16,
2024
Supervising and providing
independent opinion and
judgment to the Board
Dr. Chen Jie
(௓ᆎ) /H1118/H1118/H1118/H1118/H1118/H1118
55 Independent
non-executive
Director
December
2024
December 16,
2024
Supervising and providing
independent opinion and
judgment to the Board
Mr. Zheng
Xiaodong
(؇)H1118/H1118/H1118/H1118/H1118
47 Independent non-
executive
Director
September
2023
September 12,
2023
Supervising and providing
independent opinion and
judgment to the Board
DIRECTORS AND SENIOR MANAGEMENT
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None of the Directors and senior management of the Company is related to other
Directors or senior management of the Company. Save as disclosed in this section, (i) none of
the Directors held any directorships in public companies, the securities of which are listed on
any securities market in Hong Kong or overseas in the last three years immediately preceding
the date of this prospectus; (ii) to the best knowledge, information and belief of the Directors
having made all reasonable inquiries, there were no other matters with respect to the
appointment of the Directors that need to be brought to the attention of the Shareholders and
there was no information relating to the Directors that is required to be disclosed pursuant to
Rule 13.51(2) of the Listing Rules.
Executive Directors
Mr. Zhu Yiming (׼)aged 53, is an executive Director and the chairman of the
Board. Mr. Zhu has been a Director and the chairman of the Board since the inception of the
Company. He was redesignated as an executive Director on June 10, 2025 with effect from the
Listing Date. He is primarily responsible for the overall strategic planning, business
development and enterprise management of the Group.
Other than his positions in the Company, Mr. Zhu has been serving as the chairman of the
board of directors of CXMT since February 2021, and served as the chief executive officer of
CXMT from May 2020 to April 2023. He also served as the chief executive officer of CXMT
Memory from July 2018 to April 2023, a director of CXMT Memory from July 2018 to
February 2022 and the chairman of the board of directors of CXMT Memory from December
2018 to February 2022.
Mr. Zhu obtained a bachelor’s degree in modern applied physics and a master’s degree in
engineering from Tsinghua University ( ૶ശɽኪ) in the PRC in July 1994 and June 1997,
respectively, and a master’s degree in electronic engineering from the State University of New
Y ork at Stony Brook in the United States in May 2000.
Mr. He Wei ( Оሊ), aged 58, is an executive Director, the deputy chairman of the Board
and general manager of the Company. Mr. He joined the Group in October 2009 and worked
at its operating department until December 2012. He then served as a deputy general manager
of the Company from December 2012 to July 2018 and the acting general manager of the
Company from July 2018 to April 2023. He was appointed as a Director in June 2021, the
deputy chairman of the Board in July 2023 and the general manager of the Company in April
2023, and was redesignated as an executive Director on June 10, 2025 with effect from the
Listing Date. He is primarily responsible for the strategic planning and operation management
of the Group.
DIRECTORS AND SENIOR MANAGEMENT
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Prior to joining the Group, Mr. He served as the deputy director of the Beijing sales
department of Semiconductor Manufacturing International (Beijing) Co., Ltd. (਷ყණϓ
ཥ༩Ⴁி(̏ԯ)ʮ̡) from October 2003 to September 2009 and the deputy director of the
integrated circuit department of Beijing Institute of Microelectronics Technology ( ̏ԯฆཥɿ
הfrom April 1994 to September 2003.
Mr. He obtained a bachelor’s degree in material science and a master’s degree in
engineering from Tsinghua University ( ૶ശɽኪ) in the PRC in July 1989 and March 1994,
respectively.
Mr. Hu Hong (ݳߡ)aged 43, is an executive Director and deputy general manager of
the Company. Mr. Hu joined the Group in July 2007 and served successively as an engineer,
department manager, director and head of business department until October 2022. He was
appointed as a deputy general manager of the Company in October 2022 and a Director in
December 2022, and was redesignated as an executive Director on June 10, 2025 with effect
from the Listing Date. He is primarily responsible for the strategic planning and operation
management of the Group.
Mr. Hu obtained a bachelor’s degree and a master’s degree in electronic science and
technology from Tsinghua University ( ૶ശɽኪ) in the PRC in July 2005 and July 2007,
respectively.
Non-Executive Director
Ms. Wen Tian (ܫ)aged 31, is a non-executive Director. Ms. Wen joined the Group
in March 2020 and has been serving at the compliance and legal department of the Group since
then. She served as the employee representative supervisor of the Company from November
2020 to June 2025, during which she was the chairman of the board of supervisors of the
Company from December 2020 to June 2025. Ms. Wen was appointed as an employee
representative Director in June 2025 and was redesignated as a non-executive Director on June
10, 2025 with effect from the Listing Date. She is responsible for providing advice on the
operation and management of the Group.
Ms. Wen obtained a bachelor’s degree in laws from Shanxi University ( ʆГɽኪ)i nt h e
PRC in July 2017 and a master’s degree in international business and economics laws from the
University of New South Wales in Australia in January 2019. She obtained a legal professional
qualification issued by the Ministry of Justice of the PRC (௅) in April
2021.
Independent Non-Executive Directors
Mr. Zhou Haitao ( մऎᏹ), aged 67, has been an independent Director since December
2024 and was redesignated as an independent non-executive Director on June 10, 2025 with
effect from the Listing Date. He is responsible for supervising and providing independent
opinion and judgment to the Board.
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Mr. Zhou has been a partner of ShineWing Certified Public Accountants LLP (͑ʕձ
הsince December 2009. He was a partner of Zhonghe Zhengxin Accountant Firm
(הfrom February 2007 to December 2009. Prior to that, Mr. Zhou
served as the deputy director accountant of Beijing Zhonglunxin Accountant Firm (ࡐ
הuntil February 2007 and a certified public accountant of Beijing Longzhou
Accountant Firm (הfrom August 1995 to August 1996. Prior to that, he
worked at Beijing Capital Film and Television Cultural Research Institute (ேᅂൖ˖ʷ
הand Beijing Institute of Light Industry ( ̏ԯჀʈุኪ৫, now known as Beijing
Technology and Business University ( ̏ԯʈਠɽኪ)). He has also been serving as an
independent director of Harbin Chenglin Technology Co., Ltd. (ʮ̡)
since October 2024, and served as an independent director of Aimer Co., Ltd. (ࠢ
ʮ̡, 603511.SH) from May 2023 to February 2024.
Mr. Zhou obtained a bachelor’s degree in mechanical design and manufacturing from
Beijing Institute of Light Industry in the PRC in July 1984. He has been a member of the
Chinese Institute of Certified Public Accountants since June 1999.
Mr. Zhou previously served as a supervisor of Zhongbao Assets Evaluation Co., Ltd. ( ʕ
ʮ̡,“ Zhongbao Assets Evaluation ”) immediately prior to the revocation of
its business license on January 25, 2019 due to its cessation of operations. Mr. Zhou has
confirmed that (i) Zhongbao Assets Evaluation was solvent immediately prior to the revocation
of its business license; (ii) Mr. Zhou has not incurred any liability as a result of such
revocation; and (iii) Mr. Zhou is not aware of any actual or potential claim that has been or will
be made against him as a result of such revocation.
Dr. Qian He ( ፺ᚲ), aged 62, has been an independent Director since December 2021 and
was redesignated as an independent non-executive Director on June 10, 2025 with effect from
the Listing Date. He is responsible for supervising and providing independent opinion and
judgment to the Board.
Dr. Qian has been teaching at Tsinghua University ( ૶ശɽኪ) since January 2009, and is
currently a tenured professor of the School of Integrated Circuits of Tsinghua University. Prior
to that, he served as the director of Samsung Semiconductor (China) Research Institute (݋
̒ኬ᜗(ʕ਷)הfrom June 2006 to December 2008 and worked at Institute of
Microelectronics of the Chinese Academy of Sciences (הfrom
December 1990 to May 2006, with his last position as its director. Dr. Qian has also been an
independent director of Beijing Memblaze Technology Co., Ltd. (ࠢ
ʮ̡) since June 2021 and GRINM Semiconductor Materials Co., Ltd. (ٰࣘ
΅ʮ̡, 688432.SH) since May 2021.
Dr. Qian obtained a bachelor’s degree in semiconductor, a master’s degree in
semiconductor physics and devices and a doctoral degree in engineering from Xi’an Jiaotong
University ( Гτʹஷɽኪ) in the PRC in July 1984, July 1987 and December 1990,
respectively.
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Ms. Y eung Siuman Shirley ( เʃත), aged 62, has been an independent Director since
December 2024 and was redesignated as an independent non-executive Director on June 10,
2025 with effect from the Listing Date. She is responsible for supervising and providing
independent opinion and judgment to the Board.
Ms. Y eung has been the chairman of the board of directors and founding and managing
partner of Dragonrise Capital Advisors (HK) Limited (ʮ̡) since October 2004.
She has also been the chairman of the board of directors and founding and managing partner
of Nanjing Longjun Investment Management Co., Ltd. (ʮ̡) and
Suzhou Longrui V enture Capital Management Co., Ltd. (ʮ̡)
since April 2014 and December 2009, respectively. Ms. Y eung has also been an independent
non-executive director of Shenwan Hongyuan Group Co., Ltd. (ʮ̡,
000166.SZ, 6806.HK) since November 2020.
Ms. Y eung obtained a master’s degree in business administration from Y ale University in
the United States in May 1993.
Dr. Chen Jie ( ௓ᆎ), aged 55, has been an independent Director since December 2024 and
was redesignated as an independent non-executive Director on June 10, 2025 with effect from
the Listing Date. She is responsible for supervising and providing independent opinion and
judgment to the Board.
Dr. Chen has been working at the Institute of Law of the Chinese Academy of Social
Sciences (הsince September 2004, and is currently the director of
its commercial law research department, a researcher, professor and doctoral supervisor of the
University of Chinese Academy of Social Sciences (ኪ৫ɽኪ). Dr. Chen has also
been an independent director of Deppon Logistics Co., Ltd. (ʮ̡,
603056.SH) since September 2022 and an independent non-executive director of China Life
Insurance Company Limited (ʮ̡, 601628.SH, 2628.HK) since July
2022.
Dr. Chen obtained a bachelor’s degree in laws from East China College of Political
Science and Law (ኪ৫, now known as East China University of Political Science and
Law (ɽኪ)) in the PRC in July 1992, and a master’s degree and a doctoral degree in
laws from Peking University ( ̏ԯɽኪ) in the PRC in July 1999 and July 2002, respectively.
She also conducted post-doctoral research at the Chinese Academy of Social Sciences (ٟ
ኪ৫) in the PRC from September 2002 to September 2004.
Dr. Chen previously served as a director of Beijing Fayi Bookstore Co., Ltd. (จ
ʮ̡,“ Fayi Bookstore ”) immediately prior to the revocation of its business license
on November 23, 2011 due to its cessation of operations. Dr. Chen has confirmed that (i) Fayi
Bookstore was solvent immediately prior to the revocation of its business license; (ii) Dr. Chen
has not incurred any liability as a result of such revocation; and (iii) Dr. Chen is not aware of
any actual or potential claim that has been or will be made against her as a result of such
revocation.
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Mr. Zheng Xiaodong (؇)aged 47, has been an independent Director since
September 2023 and was redesignated as an independent non-executive Director on June 10,
2025 with effect from the Listing Date. He is responsible for supervising and providing
independent opinion and judgment to the Board.
Mr. Zheng has been a managing partner of Beijing Jincheng Tongda & Neal Law Firm ( ̏ԯ
הsince December 2009. Prior to that, he served as a counsel of Norton Rose
Fulbright and an associate of T&C Law Firm (הMr. Zheng served as an
independent director of Beijing Foyou Pharma Co., Ltd. (ʮ̡,
601089.SH) from June 2019 to May 2025 and Rongsheng Petro Chemical Co., Ltd. (ٰ
ʮ̡, 002493.SZ) from May 2019 to May 2025, respectively.
Mr. Zheng obtained a bachelor’s degree in laws from Zhejiang University ( एϪɽኪ)i n
the PRC in June 2002 and a master’s degree in maritime law from the University of
Southampton in the United Kingdom in March 2004. Mr. Zheng obtained a legal professional
qualification issued by the Ministry of Justice of the PRC (௅) in February
2006.
SENIOR MANAGEMENT
The following table provides information about members of the senior management of the
Company:
Name Age Position
Time of
joining the
Group
Date of
appointment
as a member
of senior
management Roles and responsibilities
Mr. He Wei
(Оሊ) /H1118/H1118/H1118/H1118/H1118/H1118
58 Executive Director,
deputy chairman
of the Board and
general manager
October 2009 December 19,
2012
Strategic planning and
operation management of
the Group
Mr. Hu Hong
(ݳߡ)H1118/H1118/H1118/H1118/H1118/H1118
43 Executive Director
and deputy
general manager
July 2007 October 27,
2022
Strategic planning and
operation management of
the Group
Ms. Sun Guijing
(᎑) /H1118/H1118/H1118/H1118/H1118
50 Deputy general
manager and
finance director
April 2010 December 17,
2021
Financial operations and
funds management of the
Group
Mr. Li Baokui
(ҽᘒჺ) /H1118/H1118/H1118/H1118/H1118
45 Deputy general
manager
November
2011
October 27,
2022
Product design and research
and development of the
Group
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Name Age Position
Time of
joining the
Group
Date of
appointment
as a member
of senior
management Roles and responsibilities
Ms. Dong Lingyan
(໨ᜳዲ) /H1118/H1118/H1118/H1118/H1118
30 Board secretary
and joint
company
secretary
June 2024 December 16,
2024
Corporate governance,
capital operation,
information disclosures,
investor relations and
securities affairs of the
Group
For the biographies of Mr. He Wei and Mr. Hu Hong, see “— Directors — Executive
Directors” above.
Ms. Sun Guijing (᎑), aged 50, is a deputy general manager and the finance director
of the Company. Ms. Sun joined the Group in April 2010 as the head of accounting department
of the Company until November 2021, and was appointed as a deputy general manager and the
finance director of the Company in December 2021. She is primarily responsible for the
financial operations and funds management of the Group.
Ms. Sun obtained a bachelor’s degree in enterprise management from Tianjin Normal
University (ᇍɽኪ) in the PRC in July 1999 and an EMBA degree in business
administration from China Europe International Business School ( ʕᆄ਷ყʈਠኪ৫)i nt h e
PRC in November 2024. Ms. Sun obtained an intermediate accountant qualification issued by
the MOF in May 2007.
Mr. Li Baokui ( ҽᘒჺ), aged 45, is a deputy general manager of the Company. Mr. Li
joined the Group in November 2011. He served as the director of MCU chip design until
October 2022, and has been serving as the head of MCU business unit since March 2022 and
a deputy general manager of the Company since October 2022. He is primarily responsible for
the product design and research and development of the Group.
Prior to joining the Group, Mr. Li served as the manager of IC design department of
Actions Microelectronics Co., Ltd. (ʮ̡) from February 2006 to
December 2011.
Mr. Li obtained a bachelor’s degree in information engineering from Zhejiang University
(एϪɽኪ) in the PRC in June 2003, a master’s degree in microelectronics and solid state
electronics from Tianjin University (ɽኪ) in the PRC in March 2006, and an EMBA
degree in business administration from China Europe International Business School ( ʕᆄ਷ყ
ʈਠኪ৫) in the PRC in April 2025.
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Ms. Dong Lingyan ( ໨ᜳዲ), aged 30, is the Board secretary and joint company secretary
of the Company. Ms. Dong joined the Group in June 2024 as the head of investor relations, and
was appointed as the Board secretary of the Company in December 2024. She is primarily
responsible for the corporate governance, capital operation, information disclosures, investor
relations and securities affairs of the Group.
Prior to joining the Group, Ms. Dong worked at Cephei Investment Consulting (Beijing)
Co., Ltd. ( ᆗฯҳ༟ፔ༔(̏ԯ)ʮ̡) from February 2020 to June 2024, serving
successively as an industry researcher, investment manager and assistant vice president. Prior
to that, she also served as the research assistant of the research department of China
International Capital Corporation Limited (ʮ̡, 601995.SH, 3908.HK)
from July 2017 to February 2020.
Ms. Dong obtained a bachelor’s degree in accounting from Guanghua School of
Management of Peking University ( ̏ԯɽኪΈശ၍ଣኪ৫) in the PRC in June 2017.
JOINT COMPANY SECRETARIES
Ms. Dong Lingyan ( ໨ᜳዲ) has been appointed as the joint company secretary of the
Company. See “— Senior Management” above for her biography.
Ms. Wong Wai Y ee, Ella ( රᅆՅ) has been appointed as the joint company secretary of
the Company. Ms. Wong is a director of Company Secretarial Services of Vistra Group. Ms.
Wong has over 20 years of experience in the corporate secretarial field and has been providing
professional corporate services to Hong Kong listed companies as well as multinational,
private and offshore companies.
Ms. Wong is a Chartered Secretary, a Chartered Governance Professional and a Fellow of
both The Hong Kong Chartered Governance Institute (formerly known as The Hong Kong
Institute of Chartered Secretaries, “ HKCGI ”) and The Chartered Governance Institute
(formerly known as The Institute of Chartered Secretaries and Administrators) in the United
Kingdom. Ms. Wong is a holder of the Practitioner’s Endorsement from HKCGI.
OTHER INFORMATION
Rule 3.09D of the Listing Rules
Each of the Directors confirms that he or she (i) has obtained the legal advice referred to
under Rule 3.09D of the Listing Rules in June 2025, and (ii) understands his or her obligations
as a director of a listed issuer under the Listing Rules.
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Rule 3.13 of the Listing Rules
Each of the independent non-executive Directors has confirmed (i) his or her
independence as regards each of the factors referred to in Rules 3.13(1) to (8) of the Listing
Rules, (ii) that he or she had no past or present financial or other interest in the business of the
Company or its subsidiaries or any connection with any core connected person of the Company
under the Listing Rules as of the Latest Practicable Date, and (iii) that there were no other
factors that may affect his or her independence at the time of his or her appointments.
Rule 8.10(2) of the Listing Rules
Each of the Directors (other than the independent non-executive Directors) confirms that
as of the Latest Practicable Date, he or she was not interested in any business, apart from the
Group’s business, which competes or is likely to compete, either directly or indirectly, with the
Group’s business under Rule 8.10(2) of the Listing Rules.
Resignation of Directors
On December 16, 2024, Ms. Li Hong (ߎMr. Zhang Kedong (؇and Mr. Liang
Shangshang ( ૑ɪɪ) resigned as Directors as their terms of office in the fourth session of the
Board expired on the same date. There is no disagreement between/among each of Ms. Li
Hong, Mr. Zhang Kedong and Mr. Liang Shangshang and the Group, and there is no matter in
relation to their resignation that is required to be bought to the attention of the Stock Exchange
and prospective investors.
MANAGEMENT AND CORPORATE GOVERNANCE
Board Committees
Audit Committee
The Board has established the Audit Committee with written terms of reference in
compliance with Rule 3.21 of the Listing Rules and the Corporate Governance Code set out in
Appendix C1 to the Listing Rules (the “ Corporate Governance Code ”). The primary duties
of the Audit Committee are to review and supervise the financial reporting process and internal
controls system of the Group and provide advice and comments to the Board. The Audit
Committee comprises Mr. Zhou Haitao, Dr. Qian He and Ms. Y eung Siuman Shirley, with Mr.
Zhou Haitao (being the independent non-executive Director with appropriate professional
qualifications) as the chairperson.
Nomination Committee
The Board has established the Nomination Committee with written terms of reference in
compliance with Rule 3.27A of the Listing Rules and the Corporate Governance Code. The
primary duties of the Nomination Committee are to make recommendations to the Board on the
appointment of Directors and management of Board succession. The Nomination Committee
comprises Dr. Qian He, Dr. Chen Jie and Mr. Zheng Xiaodong, with Dr. Qian He as the
chairperson.
DIRECTORS AND SENIOR MANAGEMENT
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Remuneration and Appraisal Committee
The Board has established the Remuneration and Appraisal Committee with written terms
of reference in compliance with Rule 3.25 of the Listing Rules and the Corporate Governance
Code. The primary duties of the Remuneration and Appraisal Committee are to review and
make recommendations to the Board on the terms of remuneration packages, bonuses and other
compensation payable to the Directors and other senior management. The Remuneration and
Appraisal Committee comprises Dr. Chen Jie, Mr. Zheng Xiaodong and Mr. Zhou Haitao, with
Dr. Chen Jie as the chairperson.
Strategy and Sustainable Development Committee
The Board has established the Strategy and Sustainable Development Committee with
written terms of reference. The primary duties of the Strategy and Sustainable Development
Committee are to make recommendations to the Board on the Group’s long-term development
strategies, major decisions, sustainable development and ESG affairs. The Strategy and
Sustainable Development Committee comprises Mr. Zhu Yiming, Dr. Qian He and Ms. Y eung
Siuman Shirley, with Mr. Zhu Yiming as the chairperson.
Corporate Governance Code
The Company is committed to achieving high standards of corporate governance with a
view to safeguarding the interests of the Shareholders. To accomplish this, the Company
intends to comply with the code provisions in Part 2 of the Corporate Governance Code after
the Listing.
Board Diversity
The Company has adopted a board diversity policy which sets out the approach to achieve
diversity of the Board. The Company recognizes and embraces the benefits of having a diverse
Board and sees increasing diversity at the Board level, including gender diversity, as an
essential element in maintaining its competitive advantage and enhancing its ability to attract,
retain and motivate employees from the widest possible pool of available talent. In reviewing
and assessing suitable candidates to serve as a Director, the Nomination Committee will
consider a number of aspects, including, but not limited to, gender, age, cultural and
educational background, professional qualifications, skills, knowledge, and industry and
regional experience.
The Board currently consists of three female and six male Directors ranging from 31 to
67 years old with a balanced mix of knowledge and skills, including, but not limited to, overall
management and strategic development, accounting and corporate governance in addition to
relevant industry experience. They obtained degrees in various majors including electronic
engineering, material science, semiconductor and laws. Taking into account the Group’s
existing business model and specific needs, as well as the diverse background of the Directors,
the composition of the Board satisfies the board diversity policy.
DIRECTORS AND SENIOR MANAGEMENT
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The Nomination Committee is responsible for reviewing the structure and diversity of the
Board and selecting individuals to be nominated as Directors. The Nomination Committee will
monitor and evaluate the implementation of the board diversity policy from time to time to
ensure its ongoing effectiveness, and will propose any necessary amendments as required,
recommending such amendments to the Board for consideration and approval. The Nomination
Committee will also include a summary of the board diversity policy in the annual reports.
REMUNERATION
The Directors and senior management of the Company receive their remuneration in the
form of basic annual payments and performance-related annual payments, including fees,
salaries, share-based compensation and other benefits in kind.
For the years ended December 31, 2022, 2023 and 2024 and the six months ended June
30, 2025, the total remuneration of the Directors amounted to RMB29.2 million, RMB16.6
million, RMB34.3 million and RMB13.3 million, respectively. None of the Directors waived
or agreed to waive any emolument during the Track Record Period.
Under the arrangements in force as of the date of this prospectus, the Company estimates
the total remuneration payable to, and benefits in kind receivable by, the Directors by the
Group for the year ending December 31, 2025 to be approximately RMB29.9 million.
The five highest paid individuals of the Group for the years ended December 31, 2022,
2023 and 2024 and the six months ended June 30, 2025 included five, three, three and three
Directors, respectively. During the same years/period, the aggregate amount of remuneration
of the five highest paid individuals was RMB28.4 million, RMB19.7 million and RMB43.6
million and RMB17.8 million, respectively.
During the Track Record Period, no remuneration was paid to, or received by, the
Directors or the five highest paid individuals as an inducement to join or upon joining the
Group. No compensation was paid to, or received by, the Directors, former Directors or the five
highest paid individuals for the loss of office as a director of any member of the Group or of
any other office in connection with the management of the affairs of any member of the Group.
Save as disclosed above, no other payments have been made or are payable by the Group
to the Directors in respect of the Track Record Period.
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COMPLIANCE ADVISOR
The Company has appointed Altus Capital Limited as the Compliance Advisor pursuant
to Rule 3A.19 of the Listing Rules. The Compliance Advisor will provide the Company with
guidance and advice as to compliance with the requirements under the Listing Rules and
applicable Hong Kong laws. Pursuant to Rule 3A.23 of the Listing Rules, the Compliance
Advisor will, amongst other things, advise the Company in the following circumstances:
(i) before the publication of any regulatory announcement, circular or financial report;
(ii) where a transaction, which might be a notifiable or connected transaction, is
contemplated including share issues sales or transfers of treasury shares and share
repurchases;
(iii) where the Group proposes to use the proceeds of the Global Offering in a manner
different from that detailed in this prospectus or where the business activities,
development or results of the Group deviate from any forecast, estimate, or other
information in this prospectus; and
(iv) where the Stock Exchange makes an inquiry of the Company under Rule 13.10 of
the Listing Rules.
The term of appointment of the Compliance Advisor shall commence on the Listing Date
and is expected to end on the date on which the Company complies with Rule 13.46 of the
Listing Rules in respect of its financial results for the first full financial year commencing after
the Listing.
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FUTURE PLANS
See “Business — Our Strategies” for a detailed description of our future plans.
USE OF PROCEEDS
Assuming an Offer Price of HK$147.00 per H Share (being the midpoint of the range of
the Offer Price stated in this prospectus), we estimate that we will receive net proceeds of
approximately HK$4,180.7 million from the Global Offering after deducting the underwriting
commissions and other estimated expenses in connection with the Global Offering (assuming
the Offer Size Adjustment Option and the Over-allotment Option are not exercised). We intend
to use our proceeds for the purposes and in the amounts set forth below.
 approximately 40.0%, or HK$1,672.3 million, will be used for continuous
enhancement of our R&D capabilities. R&D is important for maintaining our market
position and supporting the long-term growth of our business by enabling us to
respond effectively to the evolving needs of downstream applications. Strengthening
our R&D capabilities will enable us to drive continuous product iteration and
technological innovation, further enrich and optimize our product portfolio,
capitalize on the opportunities arising from AI development, and strategically
expand into emerging markets, thereby supporting the sustained expansion of our
business. See “Business — Our Strategies — Advancing Technological Innovation,
Broadening Product Portfolio and Expanding into Emerging Fields.” In particular,
o approximately 29.0%, or HK$1,212.4 million, will be used for the further
enhancement and expansion of our R&D teams. In particular, we plan to recruit
approximately 1,500 additional talents in total in the next five years, especially
in areas including designs of MCU, automotive-grade Flash and customised
storage solutions, and high-speed interconnect interfaces, to strengthen our
competitive advantages in the specialty memory chips and high-performance
MCU market and enable us to better capture the growth opportunities
presented by AI-driven applications. The annual salaries for those R&D
personnel is expected to range from approximately HK$350,000 to HK$1.1
million depending on their working experience and seniority of the positions;
and
o approximately 11.0%, or HK$459.9 million, will be used for the procurement
of engineering materials and services and enhancement of our R&D
infrastructure. In particular, we plan to (i) procure engineering materials,
services and software, such as engineering sample chips, tape-out by foundries
and EDA; and (ii) enhance our R&D infrastructure through procurement of
R&D equipment, such as test machine, sorting machine and probe stations.
FUTURE PLANS AND USE OF PROCEEDS
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 approximately 35.0%, or HK$1,463.2 million, will be used for the strategic and
industry-related investment and acquisition. Alongside organic growth, we aim to
continue to selectively pursue strategic and industry-related partnerships,
investments and acquisitions in both Chinese Mainland and overseas that can
enhance our overall competitiveness and fuel our sustainable growth. The focus of
our strategic investments and acquisitions would be on IC design companies
specialized in areas such as analog chips, SoC or other promising ICs aligned with
industry development trends, especially associated with edge AI and automobile. We
intend to select potential targets capable of demonstrating synergies with our
existing business, enriching our product portfolio and/or strengthening our
technological capabilities, with estimated valuation ranging from RMB500 million
to RMB3,000 million and annual revenue ranging from RMB200 million to
RMB1,000 million depending on the market condition and availability of the targets.
According to the Frost & Sullivan, the suitable targets are generally available in the
market. See “Business — Our Strategies — Pursuing External Growth Through
Strategic and Industry-related Partnerships, Investments and Acquisitions.” As of
the Latest Practicable Date, we have not identified any target of potential
acquisition.
 approximately 9.0%, or HK$376.3 million, will be used for our global strategic
expansion and strengthening our global presence, including the enhancement of our
global marketing and service network. See “Business — Accelerate Our
Globalization to Build a World-Class Technology Brand.” In particular, we plan to
(i) promote the establishment of our overseas headquarter in Singapore to expand in
overseas sales in countries, such as Southeast Asia, Japan, America and Europe,
integrate global resources and enhance our brand recognition worldwide, which is
expected to service as a strategic overseas operating headquarter in the long term.
Our headquarters in Chinese Mainland and Singapore have different strategic
focuses. The Chinese Mainland headquarters serves as the headquarters for the
Group. The Singapore headquarters serves as the overseas headquarters, and is
responsible for our international strategy, overseeing and expanding overseas sales
in regions such as Southeast Asia, Japan, the Americas and Europe. This division of
strategic focus allows us to address the unique needs and opportunities of both
domestic and global markets more effectively in complex and changing market
condition. We have established strong relationships with certain local suppliers in
Singapore, taking advantage of its well-developed industrial ecosystem. By setting
up our overseas operating headquarter in Singapore, we can further leverage these
local strengths to support our international growth. We will continue to expand and
diversify our overseas supply chain to enhance our supply chain stability,
positioning us to better expand into global markets. Specifically, we plan to
establish a dedicated team at our overseas headquarters in Singapore, covering
various functions such as sales, administration, human resources and technical
support. We anticipate that the annual operating expenses of the overseas
headquarters will be approximately HK$90 million. We have obtained necessary
approvals from competent authorities to operate the overseas headquarters in
FUTURE PLANS AND USE OF PROCEEDS
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--- page 357 ---
Singapore; (ii) enhance our marketing efforts through advertising and promotional
activities including sponsoring or participating in industry exhibitions and
organizing product launch events, and (iii) expand our overseas sales and service
network across countries including the United States, South Korea, Japan, the
United Kingdom, Germany and Singapore, through deep collaboration with
localized teams and channel partners to provide customers with rapid response and
customized services.
 approximately 6.0%, or HK$250.8 million, will be used for the improvement of
operational efficiency. See “Business — Our Strategies — Fully Embrace AI to
Seize the Unprecedented Opportunities in Industry Development.” In particular, we
plan to (i) establish AI-enabled management systems, such as EDA AI design, AI
code generation, AI agent development and AI-powered office solutions, through the
combination of self-development and procurement of software available in the
market to comprehensively enhance the operational efficiency, enabling in-depth
data analysis and intelligent decision-making. For example, by implementing
AI-powered office solutions, we expect to improve the efficiency of daily meetings,
communications, document management and other collaborative office scenarios;
and (ii) implement digitalized management systems through procurement of mature
software for our R&D and supply chain operations to strengthen end-to-end
coordination and responsiveness.
 approximately 10.0%, or HK$418.1 million, will be used for working capital and
other general corporate purposes.
In the event that the Offer Price is set at the maximum Offer Price or the minimum Offer
Price of the indicative Offer Price range, the net proceeds of the Global Offering will increase
or decrease by approximately HK$430.2 million, respectively. If we make an upward or
downward offer price adjustment to set the final Offer Price to be above or below the mid-point
of the Offer Price range, we will increase or decrease the allocation of the net proceeds to the
above purposes on a pro rata basis.
The additional net proceeds that we would receive if the Over-allotment Option and the
Offer Size Adjustment Option were exercised in full would be (i) HK$1,231.2 million
(assuming an Offer Price of HK$162.00 per H Share, being the maximum Offer Price of the
indicative Offer Price range), (ii) HK$1,117.2 million (assuming an Offer Price of HK$147.00
per H Share, being the mid-point of the indicative Offer Price range) and (iii) HK$1,003.2
million (assuming an Offer Price of HK$132.00 per H Share, being the minimum Offer Price
of the indicative Offer Price range). We intend to apply the additional net proceeds to the above
uses on a pro rata basis.
To the extent that the net proceeds of the Global Offering are not immediately used for
the above purposes, we will only deposit such proceeds in short-term interest-bearing accounts
at licensed commercial banks and/or other authorized financial institutions (as defined under
the Securities and Futures Ordinance or applicable laws and regulations in other jurisdictions).
In such event, we will comply with the appropriate disclosure requirements under the Listing
Rules.
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HONG KONG UNDERWRITERS
China International Capital Corporation Hong Kong Securities Limited
Huatai Financial Holdings (Hong Kong) Limited
UNDERWRITING
This prospectus is published solely in connection with the Hong Kong Public Offering.
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters on a
conditional basis. The International Offering is expected to be fully underwritten by the
International Underwriters.
The Global Offering comprises the Hong Kong Public Offering of initially 2,891,600
Hong Kong Offer Shares and the International Offering of initially 26,024,200 International
Offering Shares, subject to, in each case, reallocation on the basis as described in the section
headed “Structure of the Global Offering” in this prospectus, the Offer Size Adjustment Option
as well as the Over-allotment Option (in the case of the International Offering).
UNDERWRITING ARRANGEMENTS AND EXPENSES
Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, the Company is offering the Hong
Kong Offer Shares for subscription on the terms and conditions set out in this prospectus and
the Hong Kong Underwriting Agreement at the Offer Price.
Subject to (a) the Listing Committee granting approval for the listing of, and permission
to deal in, the H Shares (including any additional H Shares that may be issued pursuant to the
exercise of the Offer Size Adjustment Option and the Over-allotment Option) on the Main
Board of the Stock Exchange and such approval not having been subsequently revoked prior
to the commencement of trading of the H Shares on the Stock Exchange and (b) certain other
conditions set out in the Hong Kong Underwriting Agreement, the Hong Kong Underwriters
have agreed severally but not jointly to procure subscribers for, or themselves to subscribe for,
their respective applicable proportions of the Hong Kong Offer Shares being offered which are
not taken up under the Hong Kong Public Offering on the terms and conditions set out in this
prospectus and the Hong Kong Underwriting Agreement.
The Hong Kong Underwriting Agreement is conditional on, among other things, the
International Underwriting Agreement having been executed and becoming unconditional and
not having been terminated in accordance with its terms.
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Grounds for termination
If any of the events set out below occur at any time prior to 8:00 a.m. on the Listing Date,
the Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters) shall
be entitled by written notice to the Company to terminate the Hong Kong Underwriting
Agreement with immediate effect:
(i) there develops, occurs, exists or comes into force:
(a) any new law or regulation or any change or development involving a
prospective change or any event or series of events or circumstances likely to
result in a change or a development involving a prospective change in existing
laws or regulations, or the interpretation or application thereof by any court or
any competent authority in or affecting Hong Kong, the PRC, the United
States, the United Kingdom, the European Union (or any member thereof),
Japan, Singapore, Taiwan, South Korea, or other jurisdictions relevant to the
Group or the Global Offering (each a “ Relevant Jurisdiction ” and
collectively, the “ Relevant Jurisdictions ”); or
(b) any change or development involving a prospective change, or any event or
series of events or circumstances likely to result in a change or prospective
change, in any local, national, regional or international financial, political,
military, industrial, economic, fiscal, legal, regulatory, currency, credit or
market conditions or sentiments, Taxation, equity securities or currency
exchange rate or controls or any monetary or trading settlement system, or
foreign investment regulations (including, without limitation, a devaluation of
the Hong Kong dollar, United States dollar or Renminbi against any foreign
currencies, a change in the system under which the value of the Hong Kong
dollar is linked to that of the United States dollar or the Renminbi is linked to
any foreign currency or currencies) or other financial markets (including,
without limitation, conditions and sentiments in stock and bond markets,
money and foreign exchange markets, the inter-bank markets and credit
markets) in or affecting any Relevant Jurisdictions, or affecting an investment
in the Offer Shares; or
(c) any event or series of events, or circumstances in the nature of force majeure
(including, without limitation, any acts of government, declaration of a
regional, national or international emergency or war, calamity, crisis, economic
sanctions, strikes, labor disputes, other industrial actions, lock-outs, fire,
explosion, flooding, tsunami, earthquake, volcanic eruption, civil commotion,
riots, rebellion, public disorder, paralysis in government operations, acts of
war, epidemic, pandemic, outbreak or escalation, mutation or aggravation of
diseases, accident or interruption or delay in transportation, local, national,
UNDERWRITING
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regional or international outbreak or escalation of hostilities (whether or not
war is or has been declared), act of God or act of terrorism (whether or not
responsibility has been claimed)) in or affecting any of the Relevant
Jurisdictions; or
(d) the imposition or declaration of any moratorium, suspension or limitation
(including without limitation, any imposition of or requirement for any
minimum or maximum price limit or price range) on (i) the trading in shares
or securities generally on the Stock Exchange, the Shanghai Stock Exchange,
the Shenzhen Stock Exchange, the Tokyo Stock Exchange, the Singapore Stock
Exchange, the New Y ork Stock Exchange, the NASDAQ Global Market or the
London Stock Exchange; or (ii) the trading in any securities of the Company
listed or quoted on a stock exchange or an over-the-counter market; or
(e) the imposition or declaration of any general moratorium on banking activities
in or affecting any of the Relevant Jurisdictions or any disruption in
commercial banking or foreign exchange trading or securities settlement or
clearing services, procedures or matters in or affecting any of the Relevant
Jurisdictions; or
(f) other than with the prior written consent of the Overall Coordinators, the issue
or requirement to issue by the Company of a supplement or amendment to this
prospectus or other documents in connection with the offer and sale of the
Offer Shares pursuant to the Companies (Winding up and Miscellaneous
Provisions) Ordinance or the Listing Rules or upon any requirement or request
of the Stock Exchange and/or the SFC; or
(g) the commencement by any authority of any public action or investigation
against a Group Company or a Director or a senior management member of the
Company as named in this prospectus or announcing an intention to take any
such action; or
(h) the imposition of sanctions or export controls in whatever form, directly or
indirectly, on any member of the Group by or on any Relevant Jurisdiction, or
the withdrawal of trading privileges which existed on the date of the Hong
Kong Underwriting Agreement, in whatever form, directly or indirectly, by, or
for, any Relevant Jurisdiction; or
(i) any valid demand by creditors for payment or repayment of indebtedness of
any member of the Group or in respect of which any member of the Group is
liable prior to its stated maturity; or
(j) an order or petition is presented for the winding-up or liquidation of any
member of the Group, or any member of the Group makes any composition or
arrangement with its creditors or enters into a scheme of arrangement or any
UNDERWRITING
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resolution is passed for the winding-up of any member of the Group or a
provisional liquidator, receiver or manager is appointed over all or part of the
assets or undertaking of any member of the Group or anything analogous
thereto occurs in respect of any member of the Group; or
(k) any non-compliance of this prospectus (or any other documents used in
connection with the contemplated offering, allotment, issue, subscription or
sale of any of the Offer Shares), the CSRC Filings (as defined in the Hong
Kong Underwriting Agreement) or any aspect of the Global Offering with the
Listing Rules or any other applicable Laws; or
(l) any litigation, dispute, legal action or claim or regulatory or administrative
investigation or action being threatened, instigated or announced against any
member of the Group or any Director or senior management members as named
in this prospectus; or
(m) any contravention by any member of the Group or any Director of the Listing
Rules or applicable laws; or
(n) any change or prospective change, or a materialization of, any of the risks set
out in the section headed “Risk Factors” in this prospectus, or
(o) that the Chairman of the Board, any Director or any member of senior
management of the Company named in this prospectus seeks to retire, or is
removed from office or vacating his/her office;
which, in any such case individually or in the aggregate, in the sole and absolute
opinion of the Joint Sponsors and the Overall Coordinators (for themselves and on
behalf of the Hong Kong Underwriters): (A)has or will or may have a Material
Adverse Effect (as defined in the Hong Kong Underwriting Agreement); or (B) has
or will or may have a material adverse effect on the success of the Global Offering
or the level of applications under the Hong Kong Public Offering or the level of
indications of interest under the International Offering; or (C) makes or will make
or may make it impracticable, inadvisable, inexpedient or incapable for the Global
Offering to be performed or implemented as envisaged, or for the Global Offering
to proceed, or to market the Global Offering, or the delivery or distribution of the
Offer Shares on the terms and in the manner contemplated by the Offering
Documents (as defined in the Hong Kong Underwriting Agreement); or (D) has or
will or may have the effect of making any part of the Hong Kong Underwriting
Agreement (including underwriting) incapable of performance in accordance with
its terms or preventing the processing of applications and/or payments pursuant to
the Global Offering or pursuant to the underwriting thereof; or
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(ii) there has come to the notice of the Joint Sponsors and the Overall Coordinators (for
themselves and on behalf of the Hong Kong Underwriters) that:
(p) any statement made by or on behalf of the Company contained in any of the
Offering Documents, the CSRC Filings and/or any notices, announcements,
advertisements, communications or other documents issued or used by or on
behalf of the Company in connection with the Hong Kong Public Offering
(including any supplement or amendment thereto but excluding names, logos,
addresses and qualifications of the Joint Sponsors, the Sponsor-Overall
Coordinator, the Overall Coordinators, the Joint Global Coordinators, the
CMIs, the Joint Bookrunners, the Joint Lead Managers, the Hong Kong
Underwriters or any of them for inclusion therein) (the “ Global Offering
Document(s) ”) was, when it was issued, or has become untrue, incorrect,
inaccurate in any material respect or misleading; or that any estimate, forecast,
expression of opinion, intention or expectation contained in any such
documents, was, when it was issued, or has become unfair or misleading in any
respect or based on untrue, dishonest or unreasonable assumptions; or
(q) any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the date of this prospectus, constitute a material
omission or misstatement in any Global Offering Document; or
(r) any breach of, or any event or circumstance rendering untrue or incorrect or
misleading in any respect, any of the representations, warranties and
undertakings given by the Company in the Hong Kong Underwriting
Agreement or the International Underwriting Agreement; or
(s) any event, act or omission which gives rise or is likely to give rise to any
liability of any of the Indemnifying Parties (as defined in the Hong Kong
Underwriting Agreement) (“ Indemnifying Parties ”) pursuant to the
indemnities in the Hong Kong Underwriting Agreement; or
(t) any material breach of any of the obligations or undertakings imposed upon the
Company under the Hong Kong Underwriting Agreement or the International
Underwriting Agreement; or
(u) there is any change or development involving a prospective change,
constituting or having a Material Adverse Effect (as defined in the Hong Kong
Underwriting Agreement); or
(v) any Director or any member of senior management of the Company named in
this prospectus is being charged with an indictable offence or prohibited by
operation of law or otherwise disqualified from taking part in the management
or taking directorship of a company; or
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(w) the Company withdraws this prospectus (and/or any other documents used in
connection with the subscription or sale of any of the Offer Shares pursuant to
the Global Offering) or the Global Offering; or
(x) that the approval by the Listing Committee of the listing of, and permission to
deal in, the H Shares in issue and to be issued pursuant to the Global Offering
(including pursuant to any exercise of the Over-allotment Option) is refused or
not granted, other than subject to customary conditions, on or before the
Listing Date, or if granted, the approval is subsequently withdrawn, cancelled,
qualified (other than by customary conditions), revoked or withheld; or
(y) any expert named in this prospectus (other than any of the Joint Sponsors) has
withdrawn its consent to the issue of this prospectus with the inclusion of its
reports, letters and/or legal opinions (as the case may be) and references to its
name included in the form and context in which it respectively appears; or
(z) any prohibition on the Company for whatever reason from offering, allotting,
issuing or selling any of the Offer Shares pursuant to the terms of the Global
Offering; or
(aa) the notice of acceptance of the CSRC Filings issued by the CSRC and/or the
results of the CSRC Filings published on the website of the CSRC is rejected,
withdrawn, revoked or invalidated,
(bb) that a material portion of the orders placed or confirmed in the bookbuilding
process have been withdrawn, terminated or cancelled, or with respect to which
the payment of the relevant orders and/or investment commitment has not been
received or settled in the stipulated time and manner or otherwise,
then, in each case, the Overall Coordinators (for themselves and on behalf of the
Hong Kong Underwriters) may, in their sole and absolute discretion and upon giving
notice in writing to the Company, terminate the Hong Kong Underwriting
Agreement with immediate effect.
Undertakings to the Stock Exchange pursuant to the Listing Rules
Undertakings by the Company
Pursuant to Rule 10.08 of the Listing Rules, the Company has undertaken to the Stock
Exchange that it will not issue any further Shares or securities convertible into equity securities
of the Company (whether or not of a class already listed) or enter into any agreement to such
issue within six months from the Listing Date (whether or not such issue of Shares or securities
will be completed within six months from the Listing Date), except pursuant to the Global
Offering, the exercise of the Offer Size Adjustment Option and the Over-allotment Option or
for the circumstances permitted under Rule 10.08 of the Listing Rules.
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Undertakings pursuant to the Hong Kong Underwriting Agreement
(A) Undertakings by the Company
Except for the offer and sale of the Offer Shares pursuant to the Global Offering
(including pursuant to the Offer Size Adjustment Option and the Over-allotment Option) or
pursuant to the Share Incentive Plans, during the period commencing on the date of the Hong
Kong Underwriting Agreement and ending on, and including, the date that is six months after
the Listing Date (the “ First Six-Month Period ”), the Company has undertaken to each of the
Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Hong Kong Underwriters and the Capital Market
Intermediaries not and to procure each other member of the Group not to without the prior
written consent of the Joint Sponsors and the Overall Coordinators (for themselves and on
behalf of the Hong Kong Underwriters) and unless in compliance with the requirements of the
Listing Rules:
(i) allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract or agree
to allot, issue or sell, mortgage, charge, pledge, hypothecate, lend, grant or sell any
option, warrant, contract or right to subscribe for or purchase, grant or purchase any
option, warrant, contract or right to allot, issue or sell, or otherwise transfer or
dispose of or create an encumbrance over, or agree to transfer or dispose of or create
an encumbrance over, either directly or indirectly, conditionally or unconditionally,
or repurchase, any Shares or other securities of the Company, as applicable, or any
interest in any of the foregoing (including, without limitation, any securities
convertible into or exchangeable or exercisable for or that represent the right to
receive, or any warrants or other rights to purchase, any Shares or other securities
of the Company, as applicable or any interest in any of the foregoing), or deposit any
Shares or other securities of the Company, as applicable, with a depositary in
connection with the issue of depositary receipts; or
(ii) enter into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership (legal or beneficial) of any
Shares or other securities of the Company, as applicable, or any interest in any of
the foregoing (including, without limitation, any securities of which are convertible
into or exchangeable or exercisable for or that represent the right to receive, or any
warrants or other rights to purchase, any Shares or other securities of the Company,
as applicable or any interest in any of the foregoing); or
(iii) enter into any transaction with the same economic effect as any transaction
described in paragraphs (i) or (ii) above; or
(iv) offer to or agree to or announce any intention to effect any transaction specified in
paragraphs (i), (ii) or (iii) above.
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In each case, whether any of the transactions specified in (i), (ii) or (iii) above is to be
settled by delivery of Shares or other securities of the Company in cash or otherwise (whether
or not the issue of such Shares or other shares or securities will be completed within the First
Six-Month Period).
In the event that during the period of six months commencing on the date on which the
First Six-Month Period expires (the “ Second Six-Month Period ”), the Company enters into
any of the transactions specified in paragraphs (i), (ii) or (iii) above or offers to or agrees to
or announces any intention to effect any such transaction, the Company shall take all
reasonable steps to ensure that it will not create a disorderly or false market in the securities
of the Company.
Hong Kong Underwriters’ interests in the Company
Save for their respective obligations under the Hong Kong Underwriting Agreement, as
of the Latest Practicable Date, save as disclosed in this prospectus, none of the Hong Kong
Underwriters was interested, legally or beneficially, directly or indirectly, in any Shares or any
securities of any member of the Group or had any right or option (whether legally enforceable
or not) to subscribe for or purchase, or to nominate persons to subscribe for or purchase, any
Shares or any securities of any member of the Group.
Following the completion of the Global Offering, the Hong Kong Underwriters and their
affiliated companies may hold a certain portion of the Shares as a result of fulfilling their
respective obligations under the Hong Kong Underwriting Agreement.
International Offering
International Underwriting Agreement
In connection with the International Offering, the Company expects to enter into the
International Underwriting Agreement with, among others, the International Underwriters.
Under the International Underwriting Agreement and subject to the Offer Size Adjustment
Option and the Over-allotment Option, the International Underwriters would, subject to certain
conditions set out therein, agree severally but not jointly to procure subscribers for, or
themselves to subscribe for, their respective applicable proportions of the International
Offering Shares initially being offered pursuant to the International Offering. It is expected that
the International Underwriting Agreement may be terminated on similar grounds as the Hong
Kong Underwriting Agreement. Potential investors should note that in the event that the
International Underwriting Agreement is not entered into, the Global Offering will not proceed.
See “Structure of the Global Offering — The International Offering” in this prospectus.
UNDERWRITING
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Offer Size Adjustment Option
Our Company has an Offer Size Adjustment Option which will allow the Company to,
upon signing of the International Underwriting Agreement, issue up to an aggregate of
2,891,500 additional Offer Shares, representing approximately 10% of the Offer Shares
initially offered under the Global Offering at the Offer Price to cover excess demand in the
International Offering. The Offer Size Adjustment Option provides flexibility for the Company
to increase the number of Offer Shares available for purchase under the International Offering
to cover additional market demand. Further details are set out in the section headed “Structure
of the Global Offering — Offer Size Adjustment Option” in this prospectus.
Over-allotment Option
The Company is expected to grant to the International Underwriters the Over-allotment
Option, exercisable by the Overall Coordinators on behalf of the International Underwriters at
any time from the Listing Date until 30 days after the last day for lodging applications under
the Hong Kong Public Offering, pursuant to which the Company may be required to issue up
to an aggregate of 4,337,300 Shares, representing not more than 15% of the number of Offer
Shares initially available under the Global Offering (assuming the Offer Size adjustment
Option is not exercised at all) or up to an aggregate of 4,771,000 H Shares, representing not
more than 15% of the number of Offer Shares available under the Global Offering (assuming
the Offer Size Adjustment Option is exercised in full), at the Offer Price, to cover over-
allocations in the International Offering, if any. See “Structure of the Global Offering —
Over-allotment Option” in this prospectus.
Commissions and Expenses
The Underwriters and the Capital Market Intermediaries will receive an underwriting
commission of 0.4% of the aggregate Offer Price of all the Offer Shares (including any Offer
Shares to be issued pursuant to the exercise of the Offer Size Adjustment Option and the
Over-allotment Option) (the “ Fixed Fees ”), out of which they will pay any sub-underwriting
commissions and other fees.
In addition, the Company may, at its sole discretion, pay to any one or more of the
Underwriters and the Capital Market Intermediaries a discretionary incentive fee of an
aggregate of up to 0.4% of the Offer Price for each Offer Share to be issued by the Company
under the Global Offering (including any Offer Shares to be issued pursuant to the exercise of
the Offer Size Adjustment Option and the Over-allotment Option) (the “ Discretionary Fees ”).
The ratio of the Fixed Fees and Discretionary Fees payable is therefore approximately 50:50
(on the basis that the Discretionary Fees will be fully paid).
For any unsubscribed Hong Kong Offer Shares reallocated to the International Offering,
the underwriting commission will not be paid to the Hong Kong Underwriters but will instead
be paid, at the rate applicable to the International Offering, and such commission will be paid
to the relevant International Underwriters.
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The aggregate underwriting commissions and fees together with the Stock Exchange
listing fees, the SFC transaction levy, AFRC transaction levy and the Stock Exchange trading
fee, legal and other professional fees and printing and all other expenses relating to the Global
Offering are estimated to be approximately HK$69.96 million (based on the mid-point of the
indicative price range for the Global Offering and assuming that the Offer Size Adjustment
Option and the Over-allotment Option are not exercised at all).
Indemnity
The Company has agreed to indemnify the Joint Sponsors, the Overall Coordinators, the
Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Hong Kong
Underwriters and the Capital Market Intermediaries for certain losses which they may suffer
or incur, including losses arising from their performance of their obligations under the Hong
Kong Underwriting Agreement and any breach by the Company of the Hong Kong
Underwriting Agreement.
ACTIVITIES BY SYNDICATE MEMBERS
The underwriters of the Hong Kong Public Offering and the International Offering
(together, the “ Syndicate Members ”) and their affiliates may each individually undertake a
variety of activities (as further described below) which do not form part of the underwriting or
stabilizing process.
The Syndicate Members and their affiliates are diversified financial institutions with
relationships in countries around the world. These entities engage in a wide range of
commercial and investment banking, brokerage, funds management, trading, hedging,
investing and other activities for their own account and for the account of others. In the
ordinary course of their various business activities, the Syndicate Members and their respective
affiliates may purchase, sell or hold a broad array of investments and actively trade securities,
derivatives, loans, commodities, currencies, credit default swaps and other financial
instruments for their own account and for the accounts of their customers. Such investment and
trading activities may involve or relate to assets, securities and/or instruments of the Company
and/or persons and entities with relationships with the Company and may also include swaps
and other financial instruments entered into for hedging purposes in connection with the
Group’s loans and other debt.
In relation to the Shares, the activities of the Syndicate Members and their affiliates could
include acting as agent for buyers and sellers of the Shares, entering into transactions with
those buyers and sellers in a principal capacity, including as a lender to initial purchasers of
the Shares (which financing may be secured by the Shares) in the Global Offering, proprietary
trading in the Shares, and entering into over the counter or listed derivative transactions or
listed or unlisted securities transactions (including issuing securities such as derivative
warrants listed on a stock exchange) which have their underlying assets including the Shares.
Such transactions may be carried out as bilateral agreements or trades with selected
counterparties. Those activities may require hedging activity by those entities involving,
UNDERWRITING
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directly or indirectly, the buying and selling of the Shares, which may have a negative impact
on the trading price of the Shares. All such activities could occur in Hong Kong and elsewhere
in the world and may result in the Syndicate Members and their affiliates holding long and/or
short positions in the Shares, in baskets of securities or indices including the Shares, in units
of funds that may purchase the Shares, or in derivatives related to any of the foregoing.
In relation to issues by Syndicate Members or their affiliates of any listed securities
having the Shares as their underlying securities, whether on the Stock Exchange or on any
other stock exchange, the rules of the stock exchange may require the issuer of those securities
(or one of its affiliates or agents) to act as a market maker or liquidity provider in the security,
and this will also result in hedging activity in the Shares in most cases.
All such activities may occur both during and after the end of the stabilizing period
described in the section headed “Structure of the Global Offering” in this prospectus. Such
activities may affect the market price or value of the Shares, the liquidity or trading volume
in the Shares and the volatility of the price of the Shares, and the extent to which this occurs
from day to day cannot be estimated.
It should be noted that when engaging in any of these activities, the Syndicate Members
will be subject to certain restrictions, including the following:
(a) the Syndicate Members (other than the Stabilizing Manager or any person acting for
it) must not, in connection with the distribution of the Offer Shares, effect any
transactions (including issuing or entering into any option or other derivative
transactions relating to the Offer Shares), whether in the open market or otherwise,
with a view to stabilizing or maintaining the market price of any of the Offer Shares
at levels other than those which might otherwise prevail in the open market; and
(b) the Syndicate Members must comply with all applicable laws and regulations,
including the market misconduct provisions of the SFO, including the provisions
prohibiting insider dealing, false trading, price rigging and stock market
manipulation.
Certain of the Syndicate Members or their respective affiliates have provided from time
to time, and expect to provide in the future, investment banking and other services to the
Company and each of its affiliates for which such Syndicate Members or their respective
affiliates have received or will receive customary fees and commissions.
In addition, the Syndicate Members or their respective affiliates may provide financing to
investors to finance their subscriptions of Offer Shares in the Global Offering.
UNDERWRITING
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THE GLOBAL OFFERING
This prospectus is published in connection with the Hong Kong Public Offering as part
of the Global Offering. China International Capital Corporation Hong Kong Securities Limited
and Huatai Financial Holdings (Hong Kong) Limited are the Overall Coordinators of the
Global Offering.
The listing of the H Shares on the Stock Exchange is sponsored by the Joint Sponsors. The
Joint Sponsors have made an application on behalf of the Company to the Stock Exchange for
the listing of, and permission to deal in, the H Shares to be converted from Unlisted Shares and
issued as mentioned in this prospectus.
28,915,800 Offer Shares will initially be made available under the Global Offering
comprising:
(a) the Hong Kong Public Offering of initially 2,891,600 Shares (subject to
reallocation) in Hong Kong as described in “— The Hong Kong Public Offering” in
this section below; and
(b) the International Offering of initially 26,024,200 Shares (subject to reallocation, the
Offer Size Adjustment Option and the Over-allotment Option) outside the United
States (including to professional and institutional investors within Hong Kong) in
offshore transactions in reliance on Regulation S, as described in the sub-section
headed “— The International Offering” in this section below.
Investors may either:
(i) apply for Hong Kong Offer Shares under the Hong Kong Public Offering; or
(ii) apply for or indicate an interest for International Offering Shares under the
International Offering,
but may not do both.
The Offer Shares will represent approximately 4.15% of the total Shares in issue
immediately following the completion of the Global Offering, assuming the Offer Size
Adjustment Option and the Over-allotment Option are not exercised and no additional Shares
are issued pursuant to the Share Incentive Plans. If the Over-allotment Option is exercised in
full, the Offer Shares (including Shares issued pursuant to the full exercise of the
Over-allotment Option) will represent approximately 4.74% of the total Shares in issue
(assuming the Offer Size Adjustment Option is not exercised at all) or approximately 5.19% of
the total Shares in issue (assuming the Offer Size Adjustment option is exercised in full)
immediately following the completion of the Global Offering and the issue of Offer Shares
pursuant to the Over-allotment Option.
STRUCTURE OF THE GLOBAL OFFERING
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References in this prospectus to applications, application monies or the procedure for
applications relate solely to the Hong Kong Public Offering.
THE HONG KONG PUBLIC OFFERING
Number of Offer Shares initially offered
The Company is initially offering 2,891,600 Shares for subscription by the public in Hong
Kong at the Offer Price, representing approximately 10% of the total number of Offer Shares
initially available under the Global Offering. The number of Offer Shares initially offered
under the Hong Kong Public Offering, subject to any reallocation of Offer Shares between the
International Offering and the Hong Kong Public Offering, will represent approximately 0.42%
of the total Shares in issue immediately following the completion of the Global Offering
(assuming the Offer Size Adjustment Option and the Over-allotment Option are not exercised
and no additional Shares are issued pursuant to the Share Incentive Plans).
The Hong Kong Public Offering is open to members of the public in Hong Kong as well
as to institutional and professional investors in Hong Kong. Professional investors generally
include brokers, dealers, companies (including fund managers) whose ordinary business
involves dealing in shares and other securities and corporate entities that regularly invest in
shares and other securities.
Completion of the Hong Kong Public Offering is subject to the conditions set out in “—
Conditions of the Global Offering” in this section.
Allocation
Allocation of Offer Shares to investors under the Hong Kong Public Offering will be
based solely on the level of valid applications received under the Hong Kong Public Offering.
The basis of allocation may vary, depending on the number of Hong Kong Offer Shares validly
applied for by applicants. Such allocation could, where appropriate, consist of balloting, which
could mean that some applicants may receive a higher allocation than others who have applied
for the same number of Hong Kong Offer Shares, and those applicants who are not successful
in the ballot may not receive any Hong Kong Offer Shares.
For allocation purposes only, the total number of Hong Kong Offer Shares available under
the Hong Kong Public Offering (after taking into account any reallocation referred to below)
will be divided equally into two pools: pool A and pool B (with any odd lots being allocated
to pool A). The Hong Kong Offer Shares in pool A will be allocated on an equitable basis to
valid applicants who have applied for Hong Kong Offer Shares with an aggregate subscription
price of HK$5 million (excluding the brokerage, the SFC transaction levy, AFRC transaction
levy and the Stock Exchange trading fee payable) or less. The Hong Kong Offer Shares in pool
B will be allocated on an equitable basis to valid applicants who have applied for Hong Kong
STRUCTURE OF THE GLOBAL OFFERING
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Offer Shares with an aggregate subscription price of more than HK$5 million (excluding the
brokerage, the SFC transaction levy, AFRC transaction levy and the Stock Exchange trading
fee payable) and up to the total value in pool B.
Investors should be aware that applications in pool A and applications in pool B may
receive different allocation ratios. If any Hong Kong Offer Shares in one (but not both) of the
pools are unsubscribed, such unsubscribed Hong Kong Offer Shares will be transferred to the
other pool to satisfy demand in that other pool and be allocated accordingly. For the purpose
of the immediately preceding paragraph only, the “price” for Hong Kong Offer Shares means
the price payable on application therefor (without regard to the Offer Price as finally
determined). Applicants can only receive an allocation of Hong Kong Offer Shares from either
pool A or pool B and not from both pools. Multiple or suspected multiple applications under
the Hong Kong Public Offering and any application for more than 1,445,800 Hong Kong Offer
Shares (being 50% of the 2,891,600 Offer Shares initially available under the Hong Kong
Public Offering) is liable to be rejected.
Reallocation
The Offer Shares to be offered in the Hong Kong Public Offering and the International
Offering may, in certain circumstances, be reallocated as between these offerings at the
discretion of the Overall Coordinators. Subject to the allocation cap described in the
subsequent paragraph, the Overall Coordinators may in their discretion reallocate Offer Shares
from the International Offering to the Hong Kong Public Offering to satisfy valid applications
under the Hong Kong Public Offering. In addition, if the Hong Kong Public Offering is not
fully subscribed, the Overall Coordinators will have the discretion (but shall not be under any
obligation) to reallocate to the International Offering all or any unsubscribed Hong Kong Offer
Shares in such amounts as they deem appropriate.
In each case, the additional Offer Shares reallocated to the Hong Kong Public Offering
will be allocated between Pool A and Pool B and the number of Offer Shares allocated to the
International Offering will be correspondingly reduced in such manner as the Overall
Coordinators deem appropriate. In the event of reallocation of Offer Shares between the
International Offering and the Hong Kong Public Offering, then up to 1,445,700 Offer Shares
may be reallocated from the International Offering to the Hong Kong Public Offering, so that
the total number of Offer Shares available for subscription under the Hong Kong Public
Offering will increase up to 4,337,300 Offer Shares, representing approximately 15% of the
number of Offer Shares initially available under the Global Offering (before exercise of the
Offer Size Adjustment Option and the Over-allotment Option), and the final Offer Price shall
be fixed at HK$132.00 per Offer Share (being the low-end of the indicative Offer Price range
stated in this prospectus) in accordance with Chapter 4.14 of the Guide for New Listing
Applicants.
STRUCTURE OF THE GLOBAL OFFERING
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Given the initial allocation of the Offer Shares to the Hong Kong Public Offering and the
International Offering follows Mechanism B set out under paragraph 2 of Chapter 4.14 of the
Guide for New Listing Applicants and the provision of Paragraph 4.2(b) of Practice Note 18
of the Listing Rules, no mandatory clawback or reallocation mechanism is required to increase
the number of Offer Shares under the Hong Kong Public Offering to a certain percentage of the
total number of Offer Shares offered under the Global Offering.
In the event that both the Hong Kong Public Offering and International Offering are
undersubscribed, the Global Offering will not proceed unless the Underwriters would subscribe
or procure subscribers for their respective applicable proportions of the Offer Shares being
offered which are not taken up under the Global Offering on the terms and conditions of this
prospectus and the Underwriting Agreements.
Details of any reallocation of Offer Shares between the Hong Kong Public Offering and
the International Offering will be disclosed in the results announcement of the Global Offering,
which is expected to be published on Monday, January 12, 2026.
Applications
Each applicant under the Hong Kong Public Offering will be required to give an
undertaking and confirmation in the application submitted by him that he and any person(s) for
whose benefit he is making the application has not applied for or taken up, or indicated an
interest for, and will not apply for or take up, or indicate an interest for, any International
Offering Shares under the International Offering. Such applicant’s application is liable to be
rejected if such undertaking and/or confirmation is/are breached and/or untrue (as the case may
be) or if he has been or will be placed or allocated International Offering Shares under the
International Offering.
Applicants under the Hong Kong Public Offering may be required to pay, on application
(subject to application channels), the Offer Price of HK$162.00 per Offer Share in addition to
the brokerage, the SFC transaction levy, AFRC transaction levy and the Stock Exchange
trading fee payable on each Offer Share, amounting to a total of HK$16,363.38 for one board
lot of 100 Shares. Further details are set out in the section headed “How to Apply for Hong
Kong Offer Shares” in this prospectus.
THE INTERNATIONAL OFFERING
Number of Offer Shares initially offered
The International Offering will consist of an offering of initially 26,024,200 Shares,
representing approximately 90% of the total number of Offer Shares initially available under
the Global Offering (subject to reallocation, the Offer Size Adjustment Option and the
Over-allotment Option). The number of Offer Shares initially offered under the International
Offering, subject to any reallocation of Offer Shares between the International Offering and the
Hong Kong Public Offering, will represent approximately 3.74% of the total Shares in issue
STRUCTURE OF THE GLOBAL OFFERING
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immediately following the completion of the Global Offering (assuming the Offer Size
Adjustment Option and the Over-allotment Option are not exercised and no additional Shares
are issued pursuant to the Share Incentive Plans).
Allocation
The International Offering will include selective marketing of Offer Shares to
institutional and professional investors and other investors anticipated to have a sizeable
demand for such Offer Shares. Professional investors generally include brokers, dealers,
companies (including fund managers) whose ordinary business involves dealing in shares and
other securities and corporate entities that regularly invest in shares and other securities.
Allocation of Offer Shares pursuant to the International Offering will be effected in accordance
with the “book-building” process described in “— Pricing of the Global Offering” in this
section and based on a number of factors, including the level and timing of demand, the total
size of the relevant investor’s invested assets or equity assets in the relevant sector and whether
or not it is expected that the relevant investor is likely to buy further Offer Shares and/or hold
or sell its Offer Shares after the Listing. Such allocation is intended to result in a distribution
of the Shares on a basis which would lead to the establishment of a solid professional and
institutional shareholder base to the benefit of the Group and the Shareholders as a whole.
The Overall Coordinators (on behalf of the International Underwriters) may require any
investor who has been offered Offer Shares under the International Offering and who has made
an application under the Hong Kong Public Offering to provide sufficient information to the
Overall Coordinators so as to allow it to identify the relevant applications under the Hong
Kong Public Offering and to ensure that they are excluded from any allocation of Offer Shares
under the International Offering.
Reallocation
The total number of Offer Shares to be issued or sold pursuant to the International
Offering may change as a result of the reallocation arrangement described in “— The Hong
Kong Public Offering — Reallocation” in this section above, the exercise of the Offer Size
Adjustment Option and the Over-allotment Option in whole or in part and/or any reallocation
of unsubscribed Offer Shares originally included in the Hong Kong Public Offering.
OFFER SIZE ADJUSTMENT OPTION
In order to provide flexibility for the Company to increase the number of Offer Shares
available for purchase under the International Offering to cover additional market demand, the
Company has an Offer Size Adjustment Option which will allow the Company to, upon signing
of the International Underwriting Agreement, issue up to an aggregate of 2,891,500 additional
Offer Shares (representing approximately 10% of the Offer Shares initially offered under the
Global Offering) at the Offer Price to cover excess demand in the International Offering.
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If the Offer Size Adjustment Option is exercised in full, the additional Offer Shares to be
issued pursuant thereto will represent approximately 0.41% of our issued share capital
immediately following the completion of the Global Offering (assuming the Over-allotment
Option is not exercised).
In considering whether to exercise the Offer Size Adjustment Option, the Company and
the Overall Coordinators will take into account a number of factors, including, among other
things:
(i) whether the level of interest expressed by prospective professional and institutional
investors during the book-building process under the International Offering is
sufficient to cover:
a. the total number of Offer Shares, which represents the aggregate of the Offer
Shares initially available under the Global Offering and the additional Offer
Shares upon any exercise of the Offer Size Adjustment Option; and
b. the corresponding number of Shares under the Over-allotment Option;
(ii) the prices at which prospective professional and institutional investors have
indicated they would be prepared to acquire the Offer Shares in the course of the
book-building process;
(iii) the quality of investors, with a view to establishing a solid professional institutional
and investor shareholder base to the benefit of the Company and its Shareholders as
a whole; and
(iv) general market conditions.
The dilution effect of the Offer Size Adjustment Option (assuming the Over-allotment
Option is not exercised) is set out below:
Number of H Shares
issued under the
Global Offering before the
exercise of the Offer Size
Adjustment Option (the
“Original Subscribers”)
Approximate
percentage of total
issued share capital
held by the Original
Subscribers before
the exercise of the
Offer Size Adjustment
Option
Number of H Shares
issued under the Global
Offering after the
exercise of the Offer
Size Adjustment Option
in full
Approximate
percentage of total
issued share capital
held by the Original
Subscribers after the
exercise of the Offer
Size Adjustment Option
in full
28,915,800 4.15% 31,807,300 4.55%
STRUCTURE OF THE GLOBAL OFFERING
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The Offer Size Adjustment Option will not be used for price stabilization purposes and
will not be subject to the provisions of the Securities and Futures (Price Stabilizing) Rules
(Chapter 571W of the Laws of Hong Kong). The Offer Size Adjustment Option will be in
addition to the Over-allotment Option.
The Company will disclose in its allotment results announcement if and to what extent the
Offer Size Adjustment Option has been exercised, or will confirm in the announcement that,
if the Offer Size Adjustment Option has not been exercised by then, the Offer Size Adjustment
Option has lapsed and cannot be exercised on any future date.
OVER-ALLOTMENT OPTION
In connection with the Global Offering, the Company is expected to grant the
Over-allotment Option to the International Underwriters, exercisable by the Overall
Coordinators (for itself and on behalf of the International Underwriters).
Pursuant to the Over-allotment Option, the International Underwriters will have the right,
exercisable by the Overall Coordinators at their sole and absolute discretion (on behalf of the
International Underwriters) at any time from the Listing Date until 30 days after the last day
for lodging applications under the Hong Kong Public Offering, to require the Company to issue
up to an aggregate of 4,337,300 additional Shares, representing not more than 15.0% of the
total number of Offer Shares initially available under the Global Offering (assuming the Offer
Size Adjustment Option is not exercised at all) or up to an aggregate of 4,771,000 H Shares,
representing not more than 15.0% of the number of Offer Shares available under the Global
Offering (assuming the Offer Size Adjustment Option is exercised in full), at the Offer Price
under the International Offering to, among other things, cover over-allocations in the
International Offering, if any.
If the Offer Size Adjustment Option is not exercised and the Over-allotment Option is
exercised in full, the additional Offer Shares to be issued pursuant thereto will represent
approximately 0.62% of the total Shares in issue immediately following the completion of the
Global Offering and the issue of Offer Shares pursuant to the Over-allotment Option. If the
Offer Size Adjustment Option and the Over-allotment Option are exercised in full, the
additional Offer Shares to be issued pursuant to the Over-allotment Option will represent
approximately 0.68% of the total Shares in issue immediately following the completion of the
Global Offering and the issue of Offer Shares pursuant to the Over-allotment Option. If the
Over-allotment Option is exercised, an announcement will be made.
STABILIZATION
Stabilization is a practice used by underwriters in some markets to facilitate the
distribution of securities. To stabilize, the underwriters may bid for, or purchase, the securities
in the secondary market during a specified period of time, to retard and, if possible, prevent
a decline in the initial public market price of the securities below the offer price. Such
STRUCTURE OF THE GLOBAL OFFERING
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transactions may be effected in all jurisdictions where it is permissible to do so, in each case
in compliance with all applicable laws and regulatory requirements, including those of Hong
Kong. In Hong Kong, the price at which stabilization is effected is not permitted to exceed the
offer price.
In connection with the Global Offering, the Stabilizing Manager (or any person acting for
it), on behalf of the Underwriters, may over-allocate or effect transactions with a view to
stabilizing or supporting the market price of the Offer Shares at a level higher than that which
might otherwise prevail for a limited period after the Listing Date. However, there is no
obligation on the Stabilizing Manager (or any person acting for it) to conduct any such
stabilizing action. Such stabilizing action, if taken, (a) will be conducted at the absolute
discretion of the Stabilizing Manager (or any person acting for it) and in what the Stabilizing
Manager reasonably regards as the best interest of the Company; (b) may be discontinued at
any time; and (c) is required to be brought to an end within 30 days of the last day for lodging
applications under the Hong Kong Public Offering. The number of Shares that may be
over-allocated will not exceed the number of Shares that may be sold under the Over-allotment
Option, being 4,337,300 Shares, which is approximately 15.0% of the Offer Shares initially
available under the Global Offering (assuming the Offer Size Adjustment Option is not
exercised at all) or 4,771,000 Shares, which is approximately 15.0% of the Offer Shares
available under the Global Offering (assuming the Offer Size Adjustment Option is exercised
in full).
Stabilization action will be entered into in accordance with the laws, rules and regulations
in place in Hong Kong. Stabilization action permitted in Hong Kong pursuant to the Securities
and Futures (Price Stabilizing) Rules of the SFO includes (a) over-allocating for the purpose
of preventing or minimizing any reduction in the market price of the H Shares; (b) selling or
agreeing to sell the H Shares so as to establish a short position in them for the purpose of
preventing or minimizing any reduction in the market price of the H Shares; (c) purchasing, or
agreeing to purchase, the H Shares pursuant to the Over-allotment Option in order to close out
any position established under paragraph (a) or (b) above, (d) purchasing, or agreeing to
purchase, any of the H Shares for the sole purpose of preventing or minimizing any reduction
in the market price of the H Shares, (e) selling or agreeing to sell any H Shares in order to
liquidate any position established as a result of those purchases, and (f) offering or attempting
to do anything as described in paragraph (b), (c), (d) or (e) above.
Specifically, prospective applicants for and investors in the Offer Shares should note that:
(a) the Stabilizing Manager (or any person acting for it) may, in connection with the
stabilizing action, maintain a long position in the H Shares;
(b) there is no certainty as to the extent to which and the time or period for which the
Stabilizing Manager (or any person acting for it) will maintain such a long position;
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(c) liquidation of any such long position by the Stabilizing Manager (or any person
acting for it) and selling in the open market may have an adverse impact on the
market price of the H Shares;
(d) no stabilizing action can be taken to support the price of the H Shares for longer than
the stabilization period, which will begin on the Listing Date, and is expected to
expire on Saturday, February 7, 2026, being the 30th day after the last day for
lodging applications under the Hong Kong Public Offering. After this date, when no
further stabilizing action may be taken, demand for the Shares, and therefore the
price of the Shares, could fall;
(e) the price of the H Shares cannot be assured to stay at or above the Offer Price either
during or after the stabilization period by the taking of any stabilizing action; and
(f) stabilizing bids or transactions effected in the course of the stabilizing action may
be made at any price at or below the Offer Price and can, therefore, be done at a
price below the price paid by applicants for, or investors in, the Offer Shares.
In order to effect stabilization actions, the Stabilizing Manager will arrange cover of up
to an aggregate of 4,337,300 Shares, representing up to approximately 15.0% of the initial
Offer Shares, through delayed delivery arrangements with investors who have been allocated
Offer Shares in the International Offering. The delayed delivery arrangements (if specifically
agreed by an investor) relate only to the delay in the delivery of the Offer Shares to such
investor and the Offer Price for the Offer Shares allocated to such investor will be paid before
the Listing Date.
The Company will ensure or procure that an announcement in compliance with the
Securities and Futures (Price Stabilizing) Rules of the SFO will be made within seven days of
the expiration of the stabilization period.
Over-Allocation
Following any over-allocation of Shares in connection with the Global Offering, the
Stabilizing Manager (or any person acting for it) may cover such over-allocations by exercising
the Over-allotment Option in full or in part, or by using H Shares purchased by the Stabilizing
Manager (or any person acting for it) in the secondary market at prices that do not exceed the
Offer Price or a combination of these means.
STRUCTURE OF THE GLOBAL OFFERING
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PRICING
Determining the Pricing of the Offer Shares
The Offer Price for the purposes of the various offerings under the Global Offering will
be fixed between the Company and the Overall Coordinators (for themselves and on behalf of
the Underwriters) on the Price Determination Date. The Price Determination Date is expected
to be on or around Friday, January 9, 2026 (Hong Kong time), and the allocation of the
International Offer Shares under the International Offering will be determined shortly
thereafter.
We will determine the Offer Price by reference to, among other factors, the closing price of
the A Shares on the Shanghai Stock Exchange on the last trading day on or before the Price
Determination Date (which is accessible to the Shareholders and potential investors at
https://english.sse.com.cn/markets/equities/list/overview/?COMPANY_CODE=603986&STOCK_
CODE=603986), and the Offer Price will not be more than HK$162.00. The historical prices of our
A Shares and trading volume on Shanghai Stock Exchange are set out below.
Period High Low ADTV (1)
(RMB) (RMB) (A Shares)
Y ear ended December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118178.9 77.5 11,760,581
Y ear ended December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118143.2 88.4 14,168,899
Y ear ended December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118117.5 55.2 21,026,927
Y ear of 2025 (up to the Latest
Practicable Date) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118254.4 98.6 28,876,287
Note:
(1) Average daily trading volume (“ ADTV ”) represents daily average number of the A Shares of the
Company traded over the relevant period.
The final Offer Price, the level of indications of interest in the International Offering, the
level of applications in the Hong Kong Public Offering, the basis of allocations of the Hong
Kong Offer Shares and the results of allocations in the Hong Kong Public Offering are
expected to be made available through a variety of channels in the manner described in “How
to Apply for Hong Kong Offer Shares — B. Publication of Results.”
Price Payable on Application
Applicants under the Hong Kong Public Offering may be required to pay, on application
(subject to application channels), the maximum Offer Price of HK$162.00 per each Hong Kong
Offer Share (plus 1% brokerage, 0.0027% SFC transaction levy, 0.00565% Stock Exchange
trading fee and 0.00015% AFRC transaction levy). If the Offer Price is less than HK$162.00,
STRUCTURE OF THE GLOBAL OFFERING
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appropriate refund payments (including the brokerage, SFC transaction levy, the Hong Kong
Stock Exchange trading fee and AFRC transaction levy attributable to the surplus application
monies, without any interest) will be made to successful applicants (subject to application
channels).
If, for any reason, our Company and the Overall Coordinators (for themselves and on
behalf of the Underwriters) is unable to reach agreement on the Offer Price by 12:00 noon on
Friday, January 9, 2026, the Global Offering will not proceed and will lapse.
Reduction in Indicative Offer Price Range and/or Number of Offer Shares
The Overall Coordinators (for themselves and on behalf of the Underwriters) may, where
considered appropriate, based on the level of interest expressed by prospective professional
and institutional investors during the book-building process, and with the consent of our
Company, reduce the number of Offer Shares and/or the indicative Offer Price range as stated
in this prospectus at any time on or prior to the morning of the last day for lodging applications
under the Hong Kong Public Offering. In such case, we will, as soon as practicable following
the decision to make such reduction, and in any event not later than the morning of the day
which is the last day for lodging applications under the Hong Kong Public Offering, cause to
be published on the websites of the Stock Exchange at www.hkexnews.hk and the Company
at www.gigadevice.com , notices of the reduction. Upon issue of such a notice, the revised
number of Offer Shares and/or indicative Offer Price range will be final and conclusive and the
Offer Price, if agreed upon by the Overall Coordinators, for themselves and on behalf of the
Underwriters, and our Company, will be fixed within such a revised Offer Price range. Such
notice will also include confirmation or revision, as appropriate, of the working capital
statement and the Global Offering statistics as currently set out in the prospectus and any other
financial information which may change materially as a result of such reduction. Our Company
will also, as soon as practicable following the decision to make such change, issue a
supplemental prospectus updating investors of the change in the number of Offer Shares being
offered under the Global Offering and/or the Offer Price. The Global Offering must first be
canceled and subsequently relaunched on FINI pursuant to the supplemental prospectus.
Before submitting applications for the Hong Kong Offer Shares, applicants should have
regard to the possibility that any announcement of a reduction in the number of Offer Shares
and/or the indicative Offer Price range may not be made until the day which is the last day for
lodging applications under the Hong Kong Public Offering. In the absence of any such notice
so published, the number of Offer Shares will not be reduced and/or the Offer Price, if agreed
upon by the Overall Coordinators, for themselves and on behalf of the Underwriters, and our
Company, will under no circumstances be set outside the Offer Price range as stated in this
prospectus.
In the event of a reduction in the number of Offer Shares, the Overall Coordinators (for
themselves and on behalf of the Underwriters) may, at its discretion, reallocate the number of
Offer Shares to be offered in the Hong Kong Public Offering and the International Offering.
STRUCTURE OF THE GLOBAL OFFERING
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The Offer Shares to be offered in the Hong Kong Public Offering and the Offer Shares to be
offered in the International Offering may, in certain circumstances, be reallocated between
these offerings at the discretion of the Overall Coordinators (for themselves and on behalf of
the Underwriters).
Announcement of Offer Price and Basis of Allocations
The final Offer Price, the level of indications of interest in the Global Offering, the results
of allocations and the basis of allotment of the Hong Kong Offer Shares are expected to be
announced on Monday, January 12, 2026 on the website of the Stock Exchange at
www.hkexnews.hk and on the website of our Company at www.gigadevice.com .
UNDERWRITING
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters
under the terms and conditions of the Hong Kong Underwriting Agreement and is subject to,
among other things, the Overall Coordinators (for themselves and on behalf of the
Underwriters) and the Company agreeing on the Offer Price.
The Company expects to enter into the International Underwriting Agreement relating to
the International Offering on or around the Price Determination Date.
These underwriting arrangements, including the Underwriting Agreements, are
summarized in the section headed “Underwriting” in this prospectus.
CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for Offer Shares will be conditional on, among other
things:
(a) the Listing Committee granting approval for the listing of, and permission to deal in,
the H Shares to be issued pursuant to the Global Offering on the Main Board of the
Stock Exchange and such approval not subsequently having been withdrawn or
revoked prior to the commencement of trading of the H Shares on the Stock
Exchange;
(b) the Offer Price having been agreed between the Overall Coordinators (for
themselves and on behalf of the Underwriters) and our Company;
(c) the execution and delivery of the International Underwriting Agreement on or about
the Price Determination Date; and
STRUCTURE OF THE GLOBAL OFFERING
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(d) the obligations of the Hong Kong Underwriters under the Hong Kong Underwriting
Agreement and the obligations of the International Underwriters under the
International Underwriting Agreement becoming and remaining unconditional and
not having been terminated in accordance with the terms of the respective
agreements or otherwise, in each case on or before the dates and times specified in
the respective Underwriting Agreements (unless and to the extent such conditions
are validly waived on or before such dates and times).
The consummation of each of the Hong Kong Public Offering and the International
Offering is conditional upon, among other things, the other offering becoming unconditional
and not having been terminated in accordance with its terms.
If the above conditions are not fulfilled or waived prior to the dates and times specified,
the Global Offering will lapse and the Stock Exchange will be notified immediately. Notice of
the lapse of the Hong Kong Public Offering will be published on the websites of the Company
and the Stock Exchange at www.gigadevice.com and www.hkexnews.hk , respectively, on the
next day following such lapse. In such a situation, all application monies will be returned,
without interest, on the terms set out in the section headed “How to Apply for Hong Kong Offer
Shares — D. Despatch/Collection of H Share Certificates and Refund of Application Monies”
in this prospectus. In the meantime, all application monies will be held in separate bank
account(s) with the receiving banks or other bank(s) in Hong Kong licensed under the Banking
Ordinance (Chapter 155 of the Laws of Hong Kong).
H Share certificates for the Offer Shares will only become valid evidence of title at 8:00
a.m. on Tuesday, January 13, 2026, provided that the Global Offering has become
unconditional in all respects at or before that time.
DEALINGS IN THE H SHARES
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00
a.m. in Hong Kong on Tuesday, January 13, 2026, it is expected that dealings in the H Shares
on the Stock Exchange will commence at 9:00 a.m. on Tuesday, January 13, 2026.
The H Shares will be traded in board lots of 100 Shares each and the stock code of the
H Shares will be 3986.
STRUCTURE OF THE GLOBAL OFFERING
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IMPORTANT NOTICE TO INVESTORS
OF HONG KONG PUBLIC OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong
Public Offer and below are the procedures for application.
This prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the “ HKEXnews > New Listings > New Listing Information ”
section, and our website at www.gigadevice.com.
The contents of this prospectus are identical to the prospectus as registered
with the Registrar of Companies in Hong Kong pursuant to Section 342C of the
Companies (Winding Up and Miscellaneous Provisions) Ordinance.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
Y ou can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit you
are applying for:
 are 18 years of age or older; and
 have a Hong Kong address (for the HK eIPO White Form service only) .
Unless permitted by the Listing Rules or a waiver and/or consent has been granted by the
Stock Exchange to us, you cannot apply for any Hong Kong Offer Shares if you or the
person(s) for whose benefit you are applying for:
 are an existing Shareholder or close associates; or
 are a Director or any of his/her close associates.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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2. Application Channels
The Hong Kong Public Offer period will begin at 9:00 a.m. on Wednesday, December 31,
2025 and end at 12:00 noon on Thursday, January 8, 2026 (Hong Kong time).
To apply for Hong Kong Offer Shares, you may use one of the following application
channels:
Application Channel Platform Target Investors Application Time
HK eIPO White
Form service /H1118/H1118/H1118/H1118
www.hkeipo.hk Investors who would like to
receive a physical H
Share certificate. Hong
Kong Offer Shares
successfully applied for
will be allotted and issued
in your own name.
From 9:00 a.m. on
Wednesday, December 31,
2025 to 11:30 a.m. on
Thursday, January 8,
2026, Hong Kong time.
The latest time for
completing full payment
of application monies will
be 12:00 noon on
Thursday, January 8,
2026, Hong Kong time.
HKSCC EIPO
channel /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Y our broker or custodian
who is a HKSCC
Participant will submit an
EIPO application on your
behalf through HKSCC’s
FINI system in
accordance with your
instruction.
Investors who would not
like to receive a physical
H Share certificate. Hong
Kong Offer Shares
successfully applied for
will be allotted and issued
in the name of HKSCC
Nominees, deposited
directly into CCASS and
credited to your
designated HKSCC
Participant’s stock
account.
Contact your broker or
custodian for the earliest
and latest time for giving
such instructions, as this
may vary by broker or
custodian.
The HK eIPO White Form service and the HKSCC EIPO channel are facilities subject
to capacity limitations and potential service interruptions and you are advised not to wait until
the last day of the application period to apply for Hong Kong Offer Shares.
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For those applying through the HK eIPO White Form service, once you complete
payment in respect of any application instructions given by you or for your benefit through the
HK eIPO White Form service to make an application for Hong Kong Offer Shares, an actual
application shall be deemed to have been made. If you are a person for whose benefit the
electronic application instructions are given, you shall be deemed to have declared that only
one set of electronic application instructions has been given for your benefit. If you are an
agent for another person, you shall be deemed to have declared that you have only given one
set of electronic application instructions for the benefit of the person for whom you are an
agent and that you are duly authorized to give those instructions as an agent.
For the avoidance of doubt, giving an application instruction under the HK eIPO White
Form service more than once and obtaining different payment reference numbers without
effecting full payment in respect of a particular reference number will not constitute an actual
application.
If you apply through the HK eIPO White Form service, you are deemed to have
authorized the HK eIPO White Form Service Provider to apply on the terms and conditions
in this prospectus, as supplemented and amended by the terms and conditions of the HK eIPO
White Form service.
By instructing your broker or custodian to apply for the Hong Kong Offer Shares on your
behalf through the HKSCC EIPO channel, you (and, if you are joint applicants, each of you
jointly and severally) are deemed to have instructed and authorized HKSCC to cause HKSCC
Nominees (acting as nominee for the relevant HKSCC Participants) to apply for Hong Kong
Offer Shares on your behalf and to do on your behalf all the things stated in this prospectus
and any supplement to it.
For those applying through HKSCC EIPO channel, an actual application will be deemed
to have been made for any application instructions given by you or for your benefit to HKSCC
(in which case an application will be made by HKSCC Nominees on your behalf) provided such
application instruction has not been withdrawn or otherwise invalidated before the closing time
of the Hong Kong Public Offer.
HKSCC Nominees will only be acting as a nominee for you and neither HKSCC nor
HKSCC Nominees shall be liable to you or any other person in respect of any actions taken by
HKSCC or HKSCC Nominees on your behalf to apply for Hong Kong Offer Shares or for any
breach of the terms and conditions of this prospectus.
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3. Information Required to Apply
Y ou must provide the following information with your application:
For Individual/Joint Applicants For Corporate Applicants
 Full name(s) 2 as shown on your
identity document
 Identity document’s issuing country
or jurisdiction
 Identity document type, with order
of priority:
i. HKID card; or
ii. National identification
document; or
iii. Passport; and
 Identity document number
 Full name(s)
2 as shown on your
identity document
 Identity document’s issuing country
or jurisdiction
 Identity document type, with order
of priority:
i. LEI registration document; or
ii. Certificate of incorporation; or
iii. Business registration
certificate; or
iv. Other equivalent document; and
 Identity document number
Notes:
1. If you are applying through the HK eIPO White Form service, you are required to provide a valid
e-mail address, a contact telephone number and a Hong Kong Address. Y ou are also required to declare
that the identity information provided by you follows the requirements as described in Note 2 below. In
particular, where you cannot provide a HKID number, you must confirm that you do not hold a HKID
card. The number of joint applicants may not exceed four. If you are a firm, the applicant must be in
the individual members’ names.
2. The applicant’s full name as shown on their identity document must be used and the surname, given
name, middle and other names (if any) must be input in the same order as shown on the identity
document. If an applicant’s identity document contains both an English and Chinese name, both English
and Chinese names must be used. Otherwise, either English or Chinese names will be accepted. The
order of priority of the applicant’s identity document type must be strictly followed and where an
individual applicant has a valid HKID card (including both Hong Kong Residents and Hong Kong
Permanent Residents), the HKID number must be used when making an application to subscribe for
shares in a public offer. Similarly for corporate applicants, a LEI number must be used if an entity has
a LEI certificate.
3. If the applicant is a trustee, the client identification data (“ CID”) of the trustee, as set out above, will
be required. If the applicant is an investment fund (i.e. a collective investment scheme, or CIS), the CID
of the asset management company or the individual fund, as appropriate, which has opened a trading
account with the broker will be required, as above.
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4. The maximum number of joint applicants on FINI is capped at 4 in accordance with market practice.
5. If you are applying as a nominee, you must provide: (i) the full name (as shown on the identity
document), the identity document’s issuing country or jurisdiction, the identity document type; and (ii),
the identity document number, for each of the beneficial owners or, in the case(s) of joint beneficial
owners, for each joint beneficial owner. If you do not include this information, the application will be
treated as being made for your benefit.
6. If you are applying as an unlisted company and (i) the principal business of that company is dealing in
securities; and (ii) you exercise statutory control over that company, then the application will be treated
as being for your benefit and you should provide the required information in your application as stated
above.
“Unlisted company” means a company with no equity securities listed on the Stock Exchange or any
other stock exchange.
“Statutory control” means you:
 control the composition of the board of directors of the company;
 control more than half of the voting power of the company; or
 hold more than half of the issued share capital of the company (not counting any part of it which
carries no right to participate beyond a specified amount in a distribution of either profits or
capital).
For those applying through HKSCC EIPO channel, and making an application under a
power of attorney, we and the Overall Coordinators, as our agent, have discretion to consider
whether to accept it on any conditions we think fit, including evidence of the attorney’s
authority.
Failing to provide any required information may result in your application being rejected.
4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size : 100 H Shares
Permitted number of Hong Kong
Offer Shares for application and
amount payable on application
successful allotment
: Hong Kong Offer Shares are available
for application in specified board lot
sizes only. Please refer to the amount
payable associated with each specified
board lot size in the table below.
The maximum Offer Price is HK$162.00
per H Share.
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If you are applying through the HKSCC
EIPO channel, you are required to pre-
fund your application based on the
amount specified by your broker or
custodian, as determined based on the
applicable laws and regulations in Hong
Kong. Y ou are responsible for
complying with any such pre-funding
requirement imposed by your broker or
custodian with respect to the Hong Kong
Offer Shares you applied for.
By instructing your broker or custodian
to apply for the Hong Kong Offer Shares
on your behalf through the HKSCC
EIPO channel, you (and, if you are joint
applicants, each of you jointly and
severally) are deemed to have instructed
and authorized HKSCC to cause HKSCC
Nominees (acting as nominee for the
relevant HKSCC Participants) to arrange
payment of the final Offer Price,
brokerage, SFC transaction levy, the
Stock Exchange trading fee and the
AFRC transaction levy by debiting the
relevant nominee bank account at the
Designated Bank for your broker or
custodian.
If you are applying through the HK
eIPO White Form service, you may
refer to the table below for the amount
payable for the number of H Shares you
have selected. Y ou must pay the
respective maximum amount payable on
application in full upon application for
Hong Kong Offer Shares.
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--- page 388 ---
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
HK$ HK$ HK$ HK$
100 16,363.38 2,000 327,267.55 10,000 1,636,337.70 300,000 49,090,131.00
200 32,726.75 2,500 409,084.43 20,000 3,272,675.40 400,000 65,453,508.00
300 49,090.13 3,000 490,901.31 30,000 4,909,013.10 500,000 81,816,885.00
400 65,453.51 3,500 572,718.20 40,000 6,545,350.80 600,000 98,180,262.00
500 81,816.89 4,000 654,535.08 50,000 8,181,688.50 700,000 114,543,639.00
600 98,180.26 4,500 736,351.96 60,000 9,818,026.20 800,000 130,907,016.00
700 114,543.64 5,000 818,168.86 70,000 11,454,363.90 900,000 147,270,393.00
800 130,907.01 6,000 981,802.62 80,000 13,090,701.60 1,000,000 163,633,770.00
900 147,270.40 7,000 1,145,436.39 90,000 14,727,039.30 1,200,000 196,360,524.00
1,000 163,633.76 8,000 1,309,070.15 100,000 16,363,377.00 1,445,800
(1) 236,581,704.67
1,500 245,450.65 9,000 1,472,703.94 200,000 32,726,754.00
Notes:
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is 50% of the Hong Kong Offer
Shares initially offered.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy. If your application is successful, brokerage will be paid to the Exchange Participants (as
defined in the Listing Rules) or to the HK eIPO White Form Service Provider (for applications made through
the application channel of the HK eIPO White Form service) while the SFC transaction levy, the Stock
Exchange trading fee and the AFRC transaction levy will be paid to the SFC, the Stock Exchange and the
AFRC, respectively.
5. Multiple Applications Prohibited
Y ou or your joint applicant(s) shall not make more than one application for your own
benefit, except where you are a nominee and provide the information of the underlying investor
in your application as required under the paragraph headed “ — A. Application for Hong Kong
Offer Shares — 3. Information Required to Apply ” in this section. If you are suspected of
submitting or cause to submit more than one application, all of your applications will be
rejected.
Multiple applications made either through (i) the HK eIPO White Form service, (ii)
HKSCC EIPO channel, or (iii) both channels concurrently are prohibited and will be rejected.
If you have made an application through the HK eIPO White Form service or HKSCC EIPO
channel, you or the person(s) for whose benefit you have made the application shall not apply
for any International Offer Shares.
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The H Share Registrar would record all applications into its system and identify suspected
multiple applications with identical names and identification document numbers according to
the Best Practice Note on Treatment of Multiple/Suspected Multiple Applications (“ Best
Practice Note ”) issued by the Federation of Share Registrars Limited.
Since applications are subject to personal information collection statements,
identification document numbers displayed are redacted.
6. Terms and Conditions of An Application
By applying for Hong Kong Offer Shares through the HK eIPO White Form service or
HKSCC EIPO channel, you (or as the case may be, HKSCC Nominees will do the following
things on your behalf):
(i) undertake to execute all relevant documents and instruct and authorize us and/or the
Overall Coordinators, as our agents, to execute any documents for you and to do on
your behalf all things necessary to register any Hong Kong Offer Shares allocated
to you in your name or in the name of HKSCC Nominees as required by the Articles
of Association, and (if you are applying through the HKSCC EIPO channel) to
deposit the allotted Hong Kong Offer Shares directly into CCASS for the credit of
your designated HKSCC Participant’s stock account on your behalf;
(ii) confirm that you have read and understand the terms and conditions and application
procedures set out in this prospectus and the designated website of the HK eIPO
White Form service (or as the case may be, the agreement you entered into with
your broker or custodian), and agree to be bound by them;
(iii) (if you are applying through the HKSCC EIPO channel) agree to the arrangements,
undertakings and warranties under the participant agreement between your broker or
custodian and HKSCC and observe the General Rules of HKSCC and the HKSCC
Operational Procedures for giving application instructions to apply for Hong Kong
Offer Shares;
(iv) confirm that you are aware of the restrictions on offers and sales of H Shares set out
in this prospectus and they do not apply to you, or the person(s) for whose benefit
you have made the application;
(v) confirm that you have read this prospectus and any supplement to it and have relied
only on the information and representations contained therein in making your
application (or as the case may be, causing your application to be made) and will not
rely on any other information or representations;
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(vi) agree that the Relevant Persons 1, the H Share Registrar and HKSCC will not be
liable for any information and representations not in this prospectus and any
supplement to it;
(vii) agree to disclose the details of your application and your personal data and any other
personal data which may be required about you and the person(s) for whose benefit
you have made the application to us, the Relevant Persons, the H Share Registrar,
HKSCC, HKSCC Nominees, the Stock Exchange, the SFC and any other statutory
regulatory or governmental bodies or otherwise as required by laws, rules or
regulations, for the purposes under the paragraph headed “ — G. Personal Data —
3. Purposes and 4. Transfer of personal data ” in this section;
(viii) agree (without prejudice to any other rights which you may have once your
application (or as the case may be, HKSCC Nominees’ application) has been
accepted) that you will not rescind it because of an innocent misrepresentation;
(ix) agree that subject to Section 44A(6) of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, any application made by you or HKSCC
Nominees on your behalf cannot be revoked once it is accepted, which will be
evidenced by the notification of the result of the ballot by the H Share Registrar by
way of publication of the results at the time and in the manner as specified in the
paragraph headed “ — B. Publication of Results ” in this section;
(x) confirm that you are aware of the situations specified in the paragraph headed “ —
C. Circumstances In Which You Will Not Be Allocated Hong Kong Offer Shares ”i n
this section;
(xi) agree that your application or HKSCC Nominees’ application, any acceptance of it
and the resulting contract will be governed by and construed in accordance with the
laws of Hong Kong;
(xii) agree to comply with the Companies Ordinance, the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Articles of Association and laws of any
place outside Hong Kong that apply to your application and that neither we nor the
Relevant Persons will breach any law inside and/or outside Hong Kong as a result
of the acceptance of your offer to purchase, or any action arising from your rights
and obligations under the terms and conditions contained in this prospectus;
1 Relevant Persons would include the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators,
the Joint Bookrunners, the Joint Lead Managers, the Underwriters, any of their or the Company’s respective
directors, officers, employees, partners, agents, advisers and any other parties involved in the Global Offering.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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(xiii) confirm that (a) your application or HKSCC Nominees’ application on your behalf
is not financed directly or indirectly by the Company, any of the directors, chief
executives, substantial Shareholder(s) or existing shareholder(s) of the Company or
any of its subsidiaries or any of their respective close associates; and (b) you are not
accustomed or will not be accustomed to taking instructions from the Company, any
of the directors, chief executives, substantial shareholder(s) or existing
shareholder(s) of the Company or any of its subsidiaries or any of their respective
close associates in relation to the acquisition, disposal, voting or other disposition
of the Shares registered in your name or otherwise held by you;
(xiv) warrant that the information you have provided is true and accurate;
(xv) confirm that you understand that we and the Overall Coordinators will rely on your
declarations and representations in deciding whether or not to allocate any Hong
Kong Offer Shares to you and that you may be prosecuted for making a false
declaration;
(xvi) agree to accept Hong Kong Offer Shares applied for or any lesser number allocated
to you under the application;
(xvii) declare and represent that this is the only application made and the only application
intended by you to be made to benefit you or the person for whose benefit you are
applying;
(xviii) (if the application is made for your own benefit) warrant that no other application
has been or will be made for your benefit by giving electronic application
instructions to HKSCC directly or indirectly or through the HK eIPO White Form
service or by any one as your agent or by any other person; and
(xix) (if you are making the application as an agent for the benefit of another person)
warrant that (1) no other application has been or will be made by you as agent for
or for the benefit of that person or by that person or by any other person as agent
for that person by giving electronic application instructions to HKSCC or the HK
eIPO White Form Service Provider and (2) you have due authority to give
electronic application instructions on behalf of that other person as its agent.
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B. PUBLICATION OF RESULTS
Results of Allocation
Y ou can check whether you are successfully allocated any Hong Kong Offer Shares
through:
Platform Date/Time
Applying through the HK eIPO White Form service or HKSCC EIPO channel:
Website /H1118/H1118/H1118/H1118From the “Allotment Results” page at
www.hkeipo.hk/IPOResult (or
www.tricor.com.hk/ipo/result ) with a
“search by ID” function.
The full list of (i) wholly or partially
successful applicants using the HK eIPO
White Form service and HKSCC EIPO
channel, and (ii) the number of Hong
Kong Offer Shares conditionally allotted
to them, among other things, will be
displayed at www.hkeipo.hk/IPOResult
(or www.tricor.com.hk/ipo/result ).
24 hours, from
11:00 p.m. on Monday,
January 12, 2026 to
12:00 midnight on
Sunday, January 18,
2026 (Hong Kong
time)
The Stock Exchange’s website at
www.hkexnews.hk and our website at
www.gigadevice.com which will provide
links to the above mentioned websites of
the H Share Registrar.
No later than 11:00 p.m.
on Monday, January
12, 2026 (Hong Kong
time).
Telephone
allocation /H1118
+852 3691 8488 — the allocation results
telephone enquiry line provided by the H
Share Registrar
between 9:00 a.m. and
6:00 p.m., from
Tuesday, January 13,
2026 to Friday, January
16, 2026 (Hong Kong
time) on a business day
For those applying through HKSCC EIPO channel, you may also check with your broker
or custodian from 6:00 p.m. on Friday, January 9, 2026 (Hong Kong time).
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Friday, January 9, 2026 (Hong Kong time) on a 24-hour basis and should report any
discrepancies on allotments to HKSCC as soon as practicable.
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Allocation Announcement
We expect to announce the results of the final Offer Price, the level of indications of
interest in the Global Offer, the level of applications in the Hong Kong Public Offering and the
basis of allocations of Hong Kong Offer Shares on the Stock Exchange’s website at
www.hkexnews.hk and our website at www.gigadevice.com by no later than 11:00 p.m. on
Monday, January 12, 2026 (Hong Kong time).
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG
OFFER SHARES
Y ou should note the following situations in which Hong Kong Offer Shares will not be
allocated to you or the person(s) for whose benefit you are applying for:
1. If your application is revoked:
Y our application or the application made by HKSCC Nominees on your behalf may be
revoked pursuant to Section 44A(6) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the Overall Coordinators, the H Share Registrar and their respective agents and
nominees have full discretion to reject or accept any application, or to accept only part of any
application, without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares will be void if the Stock Exchange does not
grant permission to list the H Shares either:
 within three weeks from the closing date of the application lists; or
 within a longer period of up to six weeks if the Stock Exchange notifies us of that
longer period within three weeks of the closing date of the application lists.
4. If:
 you make multiple applications or suspected multiple applications. Y ou may refer to
the paragraph headed “ — A. Application for Hong Kong Offer Shares — 5. Multiple
Applications Prohibited ” in this section on what constitutes multiple applications;
 your application instruction is incomplete;
 your payment (or confirmation of funds, as the case may be) is not made correctly;
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 the Underwriting Agreements do not become unconditional or are terminated;
 we or the Overall Coordinators believe that by accepting your application, it or we
would violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted H Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC
Participants will be required to hold sufficient application funds on deposit with their
Designated Bank before balloting. After balloting of Hong Kong Offer Shares, the Receiving
Bank will collect the portion of these funds required to settle each HKSCC Participant’s actual
Hong Kong Public Offer Share allotment from their Designated Bank.
There is a risk of money settlement failure. In the extreme event of money settlement
failure by a HKSCC Participant (or its Designated Bank), who is acting on your behalf in
settling payment for your allotted H Shares, HKSCC will contact the defaulting HKSCC
Participant and its Designated Bank to determine the cause of failure and request such
defaulting HKSCC Participant to rectify or procure to rectify the failure.
However, if it is determined that such settlement obligation cannot be met, the affected
Hong Kong Offer Shares will be reallocated to the Global Offering. Hong Kong Offer Shares
applied for by you through the broker or custodian may be affected to the extent of the
settlement failure. In the extreme case, you will not be allocated any Hong Kong Offer Shares
due to the money settlement failure by such HKSCC Participant. None of us, the Relevant
Persons, the H Share Registrar and HKSCC is or will be liable if Hong Kong Offer Shares are
not allocated to you due to the money settlement failure.
D. DESPATCH/COLLECTION OF H SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
Y ou will receive one H Share certificate for all Hong Kong Offer Shares allotted to you
under the Hong Kong Public Offering (except pursuant to applications made through the
HKSCC EIPO channel where the H Share certificates will be deposited into CCASS as
described below).
No temporary document of title will be issued in respect of the H Shares. No receipt will
be issued for sums paid on application.
H Share certificates will only become valid evidence of title at 8:00 a.m. on Tuesday,
January 13, 2026 (Hong Kong time), provided that the Global Offering has become
unconditional and the right of termination described in the section headed “Underwriting” has
not been exercised. Investors who trade H Shares prior to the receipt of H Share certificates
or the H Share certificates becoming valid do so entirely at their own risk.
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The right is reserved to retain any H Share certificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
The following sets out the relevant procedures and time:
HK eIPO White Form service HKSCC EIPO channel
Despatch/collection of H Share certificate 2
For application of
1,000,000 Hong
Kong Offer
Shares or more /H1118
Collection in person from the H
Share Registrar, Tricor Investor
Services Limited, at 17/F, Far
East Finance Centre, 16 Harcourt
Road, Hong Kong.
Time: from 9:00 a.m. to 1:00 p.m.
on Tuesday, January 13, 2026
(Hong Kong time).
If you are an individual, you must
not authorize any other person
you. If you are a corporate
applicant, your authorized
representative must bear a letter
of authorization from your
corporation stamped with your
corporation’s chop.
Both individuals and authorized
representatives must produce, at
the time of collection, evidence
of acceptable to the H Share
Registrar.
Note: If you do not collect your H Share
certificate(s) personally within the
time above, it/they will be sent to the
address specified in your application
instructions by ordinary post at your
own risk.
H Share certificate(s) will
be issued in the name of
HKSCC Nominees,
deposited into CCASS
and credited to your
designated HKSCC
Participant’s stock
account.
No action by you is
required.
2 Except in the event of any Bad Weather Signals (as defined below) in force in Hong Kong in the morning on
Monday, January 12, 2026 rendering it impossible for the relevant H Share certificates to be dispatched to
HKSCC in a timely manner, the Company shall procure the H Share Registrar to arrange for delivery of the
supporting documents and H Share certificates in accordance with the contingency arrangements as agreed
between them. Y ou may refer to “ — E. Bad Weather Arrangements ” in this section.
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HK eIPO White Form service HKSCC EIPO channel
For application of
less than
1,000,000 Hong
Kong Offer
Shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Y our H Share certificate(s) will be
sent to the address specified in
your application instructions by
ordinary post at your own risk.
Date: Monday, January 12, 2026
Refund mechanism for surplus application monies paid by you
Date /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Tuesday, January 13, 2026 Subject to the arrangement
between you and your
broker or custodian
Responsible party /H1118H Share Registrar Y our broker or custodian
Application monies
paid through
single bank
account /H1118/H1118/H1118/H1118/H1118/H1118/H1118
HK eIPO White Form e-Auto
Refund payment instructions to
your designated bank account
Y our broker or custodian
will arrange refund to
your designated bank
account subject to the
arrangement between
you and it
Application monies
paid through
multiple bank
accounts /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Refund cheque(s) will be
despatched to the address as
specified in your application
instructions by ordinary post at
your own risk
E. BAD WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or close on Thursday, January 8, 2026 if, there is/are:
 a tropical cyclone warning signal number 8 or above;
 a black rainstorm warning; and/or
 Extreme Conditions, (collectively, “ Bad Weather Signals ”), in force in Hong Kong
at any time between 9:00 a.m. and 12:00 noon on Thursday, January 8, 2026.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 386 –


--- page 397 ---
Instead they will open between 11:45 a.m. and 12:00 noon and/or close at 12:00 noon on
the next business day which does not have Weather Signals in force at any time between 9:00
a.m. and 12:00 noon.
Prospective investors should be aware that a postponement of the opening/closing of the
application lists may result in a delay in the listing date. Should there be any changes to the
dates mentioned in the section headed “Expected Timetable” in this prospectus, an
announcement will be made and published on the Stock Exchange’s website at
www.hkexnews.hk and our website at www.gigadevice.com of the revised timetable.
If a Bad Weather Signal is hoisted on Monday, January 12, 2026, the H Share Registrar
will make appropriate arrangements for the delivery of the H Share certificates to the CCASS
Depository’s service counter so that they would be available for trading on Tuesday, January
13, 2026.
If a Bad Weather Signal is hoisted on Monday, January 12, 2026, for application of less
than 1,000,000 H Shares, the despatch of physical H Share certificates will be made by
ordinary post when the post office re-opens after the Bad Weather Signal is lowered or canceled
(e.g. in the afternoon of Monday, January 12, 2026 or on Tuesday, January 13, 2026).
If a Bad Weather Signal is hoisted on Tuesday, January 13, 2026, for application of
1,000,000 Offer Shares or more, the physical H Share certificates will be available for
collection in person at the H Share Registrar’s office after the Bad Weather Signal is lowered
or canceled ( e.g. in the afternoon of Tuesday, January 13, 2026 or on Wednesday, January 14,
2026).
Prospective investors should be aware that if they choose to receive physical H Share
certificates issued in their own name, there may be a delay in receiving the H Share
certificates.
F. ADMISSION OF THE H SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the H Shares on the
Stock Exchange and we comply with the stock admission requirements of HKSCC, the H
Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement
in CCASS with effect from the date of commencement of dealings in the H Shares or any other
date HKSCC chooses. Settlement of transactions between Exchange Participants is required to
take place in CCASS on the second settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the H Shares to be admitted into
CCASS.
Y ou should seek the advice of your broker or other professional advisor for details of the
settlement arrangement as such arrangements may affect your rights and interests.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 387 –


--- page 398 ---
G. PERSONAL DATA
The following Personal Information Collection Statement applies to any personal data
collected and held by the Company, the H Share Registrar, the receiving bank and the Relevant
Persons about you in the same way as it applies to personal data about applicants other than
HKSCC Nominees. This personal data may include client identifier(s) and your identification
information. By giving application instructions to HKSCC, you acknowledge that you have
read, understood and agree to all of the terms of the Personal Information Collection Statement
below.
1. Personal Information Collection Statement
This Personal Information Collection Statement informs the applicant for, and holder of,
Hong Kong Public Offer Shares, of the policies and practices of the Company and the H Share
Registrar in relation to personal data and the Personal Data (Privacy) Ordinance (Chapter 486
of the Laws of Hong Kong).
2. Reasons for the collection of your personal data
It is necessary for applicants and registered holders of Hong Kong Offer Shares to ensure
that personal data supplied to the Company or its agents and the H Share Registrar is accurate
and up-to-date when applying for Hong Kong Offer Shares or transferring Hong Kong Offer
Shares into or out of their names or in procuring the services of the H Share Registrar.
Failure to supply the requested data or supplying inaccurate data may result in your
application for Hong Kong Offer Shares being rejected, or in the delay or the inability of the
Company or the H Share Registrar to effect transfers or otherwise render their services. It may
also prevent or delay registration or transfers of Hong Kong Offer Shares which you have
successfully applied for and/or the despatch of H Share certificate(s) to which you are entitled.
It is important that applicants for and holders of Hong Kong Offer Shares inform the
Company and the H Share Registrar immediately of any inaccuracies in the personal data
supplied.
3. Purposes
Y our personal data may be used, held, processed, and/or stored (by whatever means) for
the following purposes:
a. processing your application and refund cheque and HK eIPO White Form e-Auto
Refund payment instruction(s), where applicable, verification of compliance with
the terms and application procedures set out in this prospectus and announcing
results of allocation of Hong Kong Offer Shares;
b. compliance with applicable laws and regulations in Hong Kong and elsewhere;
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 388 –


--- page 399 ---
c. registering new issues or transfers into or out of the names of the holders of the H
Shares including, where applicable, HKSCC Nominees;
d. maintaining or updating the register of members of the Company;
e. verifying identities of applicants for and holders of the H Shares and identifying any
duplicate applications for the Shares;
f. facilitating Hong Kong Offer Shares balloting;
g. establishing benefit entitlements of holders of the H Shares, such as dividends,
rights issues, bonus issues, etc.;
h. distributing communications from the Company and its subsidiaries;
i. compiling statistical information and profiles of the holder of the H Shares;
j. disclosing relevant information to facilitate claims on entitlements; and
k. any other incidental or associated purposes relating to the above and/or to enable the
Company and the H Share Registrar to discharge their obligations to applicants and
holders of the H Shares and/or regulators and/or any other purposes to which
applicants and holders of the H Shares may from time to time agree.
4. Transfer of personal data
Personal data held by the Company and the H Share Registrar relating to the applicants
for and holders of Hong Kong Offer Shares will be kept confidential but the Company and the
H Share Registrar may, to the extent necessary for achieving any of the above purposes,
disclose, obtain or transfer (whether within or outside Hong Kong) the personal data to, from
or with any of the following:
a. the Company’s appointed agents such as financial advisers, receiving bank and
overseas principal share registrar;
b. HKSCC or HKSCC Nominees, who will use the personal data and may transfer the
personal data to the H Share Registrar, in each case for the purposes of providing its
services or facilities or performing its functions in accordance with its rules or
procedures and operating FINI and CCASS (including where applicants for the
Hong Kong Offer Shares request a deposit into CCASS);
c. any agents, contractors or third-party service providers who offer administrative,
telecommunications, computer, payment or other services to the Company or the H
Share Registrar in connection with their respective business operation;
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 389 –


--- page 400 ---
d. the Stock Exchange, the SFC and any other statutory regulatory or governmental
bodies or otherwise as required by laws, rules or regulations, including for the
purpose of the Stock Exchange’s administration of the Listing Rules and the SFC’s
performance of its statutory functions; and
e. any persons or institutions with which the holders of Hong Kong Offer Shares have
or propose to have dealings, such as their bankers, solicitors, accountants or brokers
etc.
5. Retention of personal data
The Company and the H Share Registrar will keep the personal data of the applicants and
holders of Hong Kong Offer Shares for as long as necessary to fulfill the purposes for which
the personal data were collected. Personal data which is no longer required will be destroyed
or dealt with in accordance with the Personal Data (Privacy) Ordinance (Chapter 486 of the
Laws of Hong Kong).
6. Access to and correction of personal data
Applicants for and holders of Hong Kong Offer Shares have the right to ascertain whether
the Company or the H Share Registrar hold their personal data, to obtain a copy of that data,
and to correct any data that is inaccurate. The Company and the H Share Registrar have the
right to charge a reasonable fee for the processing of such requests. All requests for access to
data or correction of data should be addressed to the Company and the H Share Registrar, at
their registered address disclosed in the section headed “Corporate information” in this
prospectus or as notified from time to time, for the attention of the company secretary, or the
H Share Registrar for the attention of the privacy compliance officer.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 390 –


--- page 401 ---
The following is the text of a report set out on pages I-1 to I-101, received from the
Company’ s reporting accountants, KPMG, Certified Public Accountants, Hong Kong, for the
purpose of incorporation in this prospectus.
ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF GIGADEVICE SEMICONDUCTOR INC. AND CHINA
INTERNATIONAL CAPITAL CORPORATION HONG KONG SECURITIES LIMITED
AND HUATAI FINANCIAL HOLDINGS (HONG KONG) LIMITED
Introduction
We report on the historical financial information of GigaDevice Semiconductor Inc. (the
“Company”) and its subsidiaries (together, the “Group”) set out on pages I-4 to I-101, which
comprises the consolidated statements of financial position of the Group and the statements of
financial position of the Company as at 31 December 2022, 2023 and 2024 and 30 June 2025,
and the consolidated statements of profit or loss and other comprehensive income, the
consolidated statements of changes in equity and the consolidated statements of cash flows, for
each of the years ended 31 December 2022, 2023 and 2024 and the six months ended 30 June
2025 (the “Track Record Period”), and material accounting policy information and other
explanatory information (together, the “Historical Financial Information”). The Historical
Financial Information set out on pages I-4 to I-101 forms an integral part of this report, which
has been prepared for inclusion in the prospectus of the Company dated 31 December 2025 (the
“Prospectus”) in connection with the initial listing of H shares of the Company on the Main
Board of The Stock Exchange of Hong Kong Limited.
Directors’ responsibility for the Historical Financial Information
The directors of the Company are responsible for the preparation of the Historical
Financial Information that gives a true and fair view in accordance with the basis of preparation
and presentation set out in Note 1 to the Historical Financial Information, and for such internal
control as the directors of the Company determine is necessary to enable the preparation of the
Historical Financial Information that is free from material misstatement, whether due to fraud
or error.
APPENDIX I ACCOUNTANTS’ REPORT
– I-1 –


--- page 402 ---
Reporting accountants’ responsibility
Our responsibility is to express an opinion on the Historical Financial Information and to
report our opinion to you. We conducted our work in accordance with Hong Kong Standard on
Investment Circular Reporting Engagements 200 “Accountants’ Reports on Historical
Financial Information in Investment Circulars” issued by the Hong Kong Institute of Certified
Public Accountants (the “HKICPA”). This standard requires that we comply with ethical
standards and plan and perform our work to obtain reasonable assurance about whether the
Historical Financial Information is free from material misstatement.
Our work involved performing procedures to obtain evidence about the amounts and
disclosures in the Historical Financial Information. The procedures selected depend on the
reporting accountants’ judgement, including the assessment of risks of material misstatement
of the Historical Financial Information, whether due to fraud or error. In making those risk
assessments, the reporting accountants consider internal control relevant to the entity’s
preparation of the Historical Financial Information that gives a true and fair view in accordance
with the basis of preparation and presentation set out in Note 1 to the Historical Financial
Information in order to design procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Our
work also included evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the Historical Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion, the Historical Financial Information gives, for the purpose of the
accountants’ report, a true and fair view of the Group’s and the Company’s financial position
as at 31 December 2022, 2023 and 2024 and 30 June 2025 and of the Group’s financial
performance and cash flows for the Track Record Period in accordance with the basis of
preparation and presentation set out in Note 1 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-2 –


--- page 403 ---
Review of stub period corresponding financial information
We have reviewed the stub period corresponding financial information of the Group
which comprises the consolidated statement of profit or loss and other comprehensive income,
the consolidated statement of changes in equity and the consolidated statement of cash flows
for the six months ended 30 June 2024 and other explanatory information (the “Stub Period
Corresponding Financial Information”). The directors of the Company are responsible for the
preparation and presentation of the Stub Period Corresponding Financial Information in
accordance with the basis of preparation and presentation set out in Note 1 to the Historical
Financial Information. Our responsibility is to express a conclusion on the Stub Period
Corresponding Financial Information based on our review. We conducted our review in
accordance with Hong Kong Standard on Review Engagements 2410 “Review of Interim
Financial Information Performed by the Independent Auditor of the Entity” issued by the
HKICPA. A review consists of making inquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with Hong Kong Standards
on Auditing and consequently does not enable us to obtain assurance that we would become
aware of all significant matters that might be identified in an audit. Accordingly, we do not
express an audit opinion. Based on our review, nothing has come to our attention that causes
us to believe that the Stub Period Corresponding Financial Information, for the purpose of the
accountants’ report, is not prepared, in all material respects, in accordance with the basis of
preparation and presentation set out in Note 1 to the Historical Financial Information.
Report on matters under the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited and the Companies (Winding Up and Miscellaneous
Provisions) Ordinance
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying
Financial Statements as defined on page I-4 have been made.
Dividends
We refer to Note 31(b) to the Historical Financial Information which contains information
about the dividends paid by the Company in respect of the Track Record Period.
KPMG
Certified Public Accountants
8th Floor, Prince’s Building
10 Chater Road
Central, Hong Kong
31 December 2025
APPENDIX I ACCOUNTANTS’ REPORT
– I-3 –


--- page 404 ---
HISTORICAL FINANCIAL INFORMATION
Set out below is the Historical Financial Information which forms an integral part of this
accountants’ report.
The consolidated financial statements of the Group for the Track Record Period, on which
the Historical Financial Information is based, were audited by KPMG under separate terms of
engagement with the Company in accordance with Hong Kong Standards on Auditing issued
by the HKICPA (the “Underlying Financial Statements”).
APPENDIX I ACCOUNTANTS’ REPORT
– I-4 –


--- page 405 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
(Expressed in Renminbi (“RMB”))
Y ears ended 31 December
Six months ended
30 June
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
RMB’000
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 8,129,992 5,760,823 7,355,978 3,609,037 4,150,309
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118(4,432,776) (4,014,515) (4,732,760) (2,308,838) (2,617,583)
Gross profit /H1118/H1118/H1118/H1118/H1118/H11183,697,216 1,746,308 2,623,218 1,300,199 1,532,726
Other income /H1118/H1118/H1118/H1118/H11185 519,300 424,401 549,914 240,110 199,744
Selling and
distribution
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(265,878) (270,498) (370,907) (170,496) (224,353)
Administrative
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(498,549) (397,553) (525,678) (239,438) (313,747)
Research and
development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(935,584) (989,953) (1,122,389) (588,268) (567,680)
Impairment loss on
trade and other
receivables /H1118/H1118/H1118/H1118/H111832(a) (743) (820) (3,667) (2,133) (465)
Impairment loss on
property, plant
and equipment /H1118/H1118/H111812(a) –––– (3,810)
Impairment loss on
intangible assets /H111814(a) – (2,630) – – (1,903)
Impairment loss on
goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H111815 (241,491) (373,372) – – –
Profit from
operations /H1118/H1118/H1118/H1118/H11182,274,271 135,883 1,150,491 539,974 620,512
Finance costs /H1118/H1118/H1118/H1118/H11186(a) (7,889) (7,115) (19,253) (9,313) (14,087)
Share of profits less
losses of
associates /H1118/H1118/H1118/H1118/H1118/H111817 (3,957) (4,020) (7,575) (2,784) (10,346)
Profit before
taxation /H1118/H1118/H1118/H1118/H1118/H1118/H11186 2,262,425 124,748 1,123,663 527,877 596,079
Income tax /H1118/H1118/H1118/H1118/H1118/H1118/H11187 (209,543) 36,393 (22,782) (10,877) (8,244)
Profit for the
year/period /H1118/H1118/H1118/H11182,052,882 161,141 1,100,881 517,000 587,835
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-5 –


--- page 406 ---
Y ears ended 31 December
Six months ended
30 June
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
RMB’000
Profit for the
year/period /H1118/H1118/H1118/H11182,052,882 161,141 1,100,881 517,000 587,835--------- ------- -- ------- --------- ---------
Other
comprehensive
income for the
year/period
(after tax): 10
Items that will not
be reclassified to
profit or loss:
– Equity
investments at
fair value
through other
comprehensive
income – net
movement in
fair value
reserves
(non-recycling) /H1118 (40,935) 162,828 193,470 (105,388) 144,915
Items that may be
reclassified
subsequently to
profit or loss:
– Exchange
differences on
translation of
financial
statements into
presentation
currency /H1118/H1118/H1118/H1118/H111882,080 17,823 17,887 6,337 (4,872)
– Share of other
comprehensive
income of
associates /H1118/H1118/H1118/H1118 127 (2) 2 1 –
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-6 –


--- page 407 ---
Y ears ended 31 December
Six months ended
30 June
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
RMB’000
Other
comprehensive
income for
the year/period /H1118 41,272 180,649 211,359 (99,050) 140,043---------
------- --------- --------- ---------
Total
comprehensive
income for
the year/period /H1118 2,094,154 341,790 1,312,240 417,950 727,878
Profit attributable
to:
Equity shareholders
of the Company /H1118 2,052,882 161,141 1,102,543 517,000 575,476
Non-controlling
interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1,662) – 12,359
2,052,882 161,141 1,100,881 517,000 587,835
Total
comprehensive
income
attributable to:
Equity shareholders
of the Company /H1118 2,094,154 341,790 1,313,902 417,950 715,519
Non-controlling
interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1,662) – 12,359
2,094,154 341,790 1,312,240 417,950 727,878
Earnings per share
Basic (RMB) /H1118/H1118/H1118/H1118/H111811(a) 3.10 0.24 1.66 0.78 0.87
Diluted (RMB) /H1118/H1118/H1118/H111811(b) 3.09 0.24 1.66 0.78 0.87
APPENDIX I ACCOUNTANTS’ REPORT
– I-7 –


--- page 408 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Expressed in RMB)
As at 31 December
As at
30 June
Note 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current assets
Property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812(a) 1,034,037 1,131,890 1,089,489 1,173,574
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813(a) 121,603 111,375 97,984 110,200
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814(a) 460,840 440,937 604,215 654,598
Goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 783,474 410,102 617,185 617,185
Interests in associates /H1118/H1118/H1118/H1118/H1118/H111817 11,800 25,734 137,074 305,219
Equity securities designated
at fair value through other
comprehensive income
(“FVOCI”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818(a) 1,533,025 1,744,389 3,365,869 3,491,699
Financial assets measured at
fair value through profit or
loss (“FVPL”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819(a) 80,000 145,612 210,894 209,150
Other non-current assets /H1118/H1118/H1118/H111822(b) 972,841 572,866 402,268 106,841
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829(b)(ii) 234,424 269,918 269,055 269,831
5,232,044 4,852,823 6,794,033 6,938,297---------- ---------- ---------- ----------
Current assets
Financial assets measured at
FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819(a) 1,857,548 1,805,558 120,000 62,503
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820(a) 2,153,876 1,990,866 2,346,368 2,400,649
Trade and bills receivables /H1118/H111821(a) 173,930 127,280 231,791 244,862
Prepayments and other
current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822(a) 320,097 386,020 608,614 942,445
Prepaid income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829(a) 34,342 27,371 14 940
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 1,347,250
Cash at bank and on hand /H1118/H1118/H111823(a) 6,874,850 7,265,862 9,128,010 7,863,121
11,414,643 11,602,957 12,434,797 12,861,770---------- ---------- ---------- ----------
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-8 –


--- page 409 ---
As at 31 December
As at
30 June
Note 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current liabilities
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824(a) 479,266 501,844 733,599 718,997
Accruals and other payables /H111825(a) 598,626 351,661 522,731 593,524
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826(a) 82,917 88,091 94,532 135,224
Financial liabilities measured
at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819(a) – – – 4,662
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827(a) – – 898,221 619,575
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828(a) 34,433 41,876 53,113 62,246
Income tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829(a) 1,422 2,703 28,311 21,402
1,196,664 986,175 2,330,507 2,155,630---------- ---------- ---------- ----------
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,217,979 10,616,782 10,104,290 10,706,140---------- ---------- ---------- ----------
Total assets less current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,450,023 15,469,605 16,898,323 17,644,437---------- ---------- ---------- ----------
Non-current liabilities
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828(a) 89,901 74,390 48,023 52,496
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111884,490 69,100 49,732 49,929
Other non-current liabilities /H1118 – 2,000 2,000 2,000
Deferred tax liabilities /H1118/H1118/H1118/H1118/H111829(b)(ii) 88,492 124,542 119,791 104,766
262,883 270,032 219,546 209,191----------
---------- ---------- ----------
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,187,140 15,199,573 16,678,777 17,435,246
Capital and reserves 31
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118667,025 666,906 664,124 664,059
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,520,115 14,532,667 15,834,381 16,575,839
Total equity attributable to
equity shareholders of the
Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,187,140 15,199,573 16,498,505 17,239,898
Non-controlling interests /H1118/H1118/H1118/H1118 – – 180,272 195,348
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,187,140 15,199,573 16,678,777 17,435,246
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-9 –


--- page 410 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
(Expressed in RMB)
As at 31 December
As at
30 June
Note 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current assets
Property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812(b) 629,943 594,198 508,922 503,021
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813(b) 65,707 46,211 38,117 27,241
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814(b) 392,110 435,291 376,798 370,859
Investments in subsidiaries /H1118/H111816 3,570,654 3,649,433 4,969,473 5,019,847
Interests in associates /H1118/H1118/H1118/H1118/H1118/H111817 – – 104,761 262,858
Equity securities designated
at FVOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818(b) 1,283,784 1,329,732 3,032,956 3,113,615
Financial assets measured at
FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819(b) 80,000 125,600 190,882 189,138
Other non-current assets /H1118/H1118/H1118/H111822(b) 814,041 564,960 393,812 11,043
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,547 33,248 41,509 43,979
6,864,786 6,778,673 9,657,230 9,541,601---------- ---------- ---------- ----------
Current assets
Financial assets measured at
FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819(b) 1,517,438 1,504,350 – 1,789
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820(b) 1,299,582 831,585 954,530 1,095,995
Trade and bills receivables /H1118/H111821(b) 700,991 1,881,079 1,780,817 1,539,805
Prepayments and other
current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822(a) 385,875 697,719 1,472,815 1,232,163
Prepaid income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,383 15,535 – 922
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 400,747
Cash at bank and on hand /H1118/H1118/H1118 4,912,449 3,532,166 2,804,213 3,219,935
8,836,718 8,462,434 7,012,375 7,491,356---------- ---------- ---------- ----------
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-10 –


--- page 411 ---
As at 31 December
As at
30 June
Note 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current liabilities
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824(b) 293,391 154,924 405,323 406,747
Accruals and other payables /H111825(b) 991,208 736,845 763,921 908,556
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826(b) 13,936 105,076 23,943 32,052
Financial liabilities measured
at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819(b) – – – 4,258
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827(b) – – 719,700 619,575
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828(b) 20,344 20,014 25,426 28,190
1,318,879 1,016,859 1,938,313 1,999,378---------- ---------- ---------- ----------
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,517,839 7,445,575 5,074,062 5,491,978---------- ---------- ---------- ----------
Total assets less current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,382,625 14,224,248 14,731,292 15,033,579---------- ---------- ---------- ----------
Non-current liabilities
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828(b) 47,700 29,131 14,173 1,185
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,850 33,991 26,819 23,775
Deferred tax liabilities /H1118/H1118/H1118/H1118/H111847,901 48,028 57,734 66,987
137,451 111,150 98,726 91,947---------- ---------- ---------- ----------
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,245,174 14,113,098 14,632,566 14,941,632
Capital and reserves 31
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118667,025 666,906 664,124 664,059
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,578,149 13,446,192 13,968,442 14,277,573
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,245,174 14,113,098 14,632,566 14,941,632
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-11 –


--- page 412 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Expressed in RMB)
Attributable to equity shareholders of the Company
Note
Share
capital
Share
premium
Treasury
share
reserve
Share-based
payment
reserve
Exchange
reserve
Fair value
reserve
Other
reserve
Retained
earnings Total
Non-
controlling
interests Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note
31(c))
(Note
31(d)(i))
(Note
31(d)(ii))
(Note
31(d)(iii))
(Note
31(d)(iv))
(Note
31(d)(v))
(Note
31(d)(vi))
Balance at 1 January 2022 /H1118/H1118/H1118/H1118 667,467 7,760,165 (434,320) 362,406 (57,323) 359,857 333,652 4,492,439 13,484,343 – 13,484,343----- ------- ------ ------ ----- ----- ----- ------- -------- ------- -- ------
Changes in equity for the year
ended 31 December 2022:
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––– 2,052,882 2,052,882 – 2,052,882
Other comprehensive income /H1118/H1118 –––– 82,080 (40,935) 127 – 41,272 – 41,272
Total comprehensive income for
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 82,080 (40,935) 127 2,052,882 2,094,154 – 2,094,154----- ------- ------ ------ ----- ----- ----- ------- -------- ------- -- ------
Restricted shares vested /H1118/H1118/H1118/H1118/H111830(b) – 118,069 105,020 (118,069) –––– 105,020 – 105,020
Cancellation of shares /H1118/H1118/H1118/H1118/H1118/H111831(d)(ii) (442) (33,114) 33,55 6––––––––
Equity settled share-based
payment expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 – – – 203,181 – – 3,108 – 206,289 – 206,289
Dividends in relation to
unvested restricted shares /H1118/H1118/H1118 – – 4,84 9––––– 4,849 – 4,849
Dividends approved and paid /H1118/H111831(b) ––––––– (707,515) (707,515) – (707,515)
(442) 84,955 143,425 85,112 – – 3,108 (707,515) (391,357) – (391,357)----- ------- ------ ------ ----- ----- ----- ------- -------- ------- --------
Balance at 31 December 2022 /H1118/H1118 667,025 7,845,120 (290,895) 447,518 24,757 318,922 336,887 5,837,806 15,187,140 – 15,187,140
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-12 –


--- page 413 ---
Attributable to equity shareholders of the Company
Note
Share
capital
Share
premium
Treasury
share
reserve
Share-based
payment
reserve
Exchange
reserve
Fair value
reserve
Other
reserve
Retained
earnings Total
Non-
controlling
interests Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 31(c))
(Note
31(d)(i))
(Note
31(d)(ii))
(Note
31(d)(iii))
(Note
31(d)(iv))
(Note
31(d)(v))
(Note
31(d)(vi))
Balance at 1 January 2023 /H1118/H1118/H1118/H1118 667,025 7,845,120 (290,895) 447,518 24,757 318,922 336,887 5,837,806 15,187,140 – 15,187,140----- ------- ------ ------ ----- ----- ----- ------- -------- ------- -- ------
Changes in equity for the year
ended 31 December 2023:
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––– 161,141 161,141 – 161,141
Other comprehensive income /H1118/H1118 –––– 17,823 162,828 (2) – 180,649 – 180,649
Total comprehensive income for
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 17,823 162,828 (2) 161,141 341,790 – 341,790----- ------- ------ ------ ----- ----- ----- ------- -------- ------- -- ------
Restricted shares vested /H1118/H1118/H1118/H1118/H111830(b) – 100,585 87,250 (100,585) –––– 87,250 – 87,250
Cancellation of shares /H1118/H1118/H1118/H1118/H1118/H111831(d)(ii) (119) (9,717) 9,83 6––––––––
Purchase of own shares /H1118/H1118/H1118/H1118/H1118/H1118 – – (101,991) ––––– (101,991) – (101,991)
Equity settled share-based
payment expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 – – – 97,13 8–––– 97,138 – 97,138
Reduction in equity securities
designated at FVOCI /H1118/H1118/H1118/H1118/H1118/H1118 ––––– (28,038) – 28,03 8–––
Dividends in relation to
unvested restricted shares /H1118/H1118/H1118 – – 1,80 2––––– 1,802 – 1,802
Dividends approved and paid /H1118/H111831(b) ––––––– (413,556) (413,556) – (413,556)
(119) 90,868 (3,103) (3,447) – (28,038) – (385,518) (329,357) – (329,357)----- ------- ------ ------ ----- ----- ----- ------- -------- ------- --------
Balance at 31 December 2023 /H1118/H1118 666,906 7,935,988 (293,998) 444,071 42,580 453,712 336,885 5,613,429 15,199,573 – 15,199,573
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-13 –


--- page 414 ---
Attributable to equity shareholders of the Company
Note
Share
capital
Share
premium
Treasury
share
reserve
Share-based
payment
reserve
Exchange
reserve
Fair value
reserve
Other
reserve
Retained
earnings Total
Non-
controlling
interests Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 31(c))
(Note
31(d)(i))
(Note
31(d)(ii))
(Note
31(d)(iii))
(Note
31(d)(iv))
(Note
31(d)(v))
(Note
31(d)(vi))
Balance at 1 January 2024 /H1118/H1118/H1118/H1118 666,906 7,935,988 (293,998) 444,071 42,580 453,712 336,885 5,613,429 15,199,573 – 15,199,573----- ------- ------ ----- ----- ----- ----- ------- -------- ------ -- ------
Changes in equity for the year
ended 31 December 2024:
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––– 1,102,543 1,102,543 (1,662) 1,100,881
Other comprehensive income /H1118/H1118 –––– 17,887 193,470 2 – 211,359 – 211,359
Total comprehensive income for
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 17,887 193,470 2 1,102,543 1,313,902 (1,662) 1,312,240----- ------- ------ ----- ----- ----- ----- ------- -------- ------ -- ------
Restricted shares vested /H1118/H1118/H1118/H1118/H111830(b) – 66,271 58,400 (66,271) –––– 58,400 – 58,400
Cancellation of shares /H1118/H1118/H1118/H1118/H1118/H111831(d)(ii) (2,782) (247,532) 250,31 4––––––––
Purchase of own shares /H1118/H1118/H1118/H1118/H1118/H1118 – – (259,564) ––––– (259,564) – (259,564)
Equity settled share-based
payment expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 – – – 158,78 0–––– 158,780 254 159,034
Capital injection from
non-controlling interests /H1118/H1118/H1118/H1118 ––––––––– 4,500 4,500
Reduction in equity securities
designated at FVOCI /H1118/H1118/H1118/H1118/H1118/H1118 ––––– (80,438) – 80,43 8–––
Increase in non-controlling
interests in connection with
acquisition of a subsidiary /H1118/H1118/H111833 ––––––––– 177,180 177,180
Share of changes in associates’
other reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– 27,414 – 27,414 – 27,414
(2,782) (181,261) 49,150 92,509 – (80,438) 27,414 80,438 (14,970) 181,934 166,964-----
------- ------ ----- ----- ----- ----- ------- -------- ------ --------
Balance at 31 December 2024 /H1118/H1118 664,124 7,754,727 (244,848) 536,580 60,467 566,744 364,301 6,796,410 16,498,505 180,272 16,678,777
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-14 –


--- page 415 ---
Attributable to equity shareholders of the Company
Note
Share
capital
Share
premium
Treasury
share
reserve
Share-based
payment
reserve
Exchange
reserve
Fair value
reserve
Other
reserve
Retained
earnings Total
Non-
controlling
interests Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 31(c))
(Note
31(d)(i))
(Note
31(d)(ii))
(Note
31(d)(iii))
(Note
31(d)(iv))
(Note
31(d)(v))
(Note
31(d)(vi))
Balance at 1 January 2025 /H1118/H1118/H1118/H1118 664,124 7,754,727 (244,848) 536,580 60,467 566,744 364,301 6,796,410 16,498,505 180,272 16,678,777----- ------- ------ ----- ----- ----- ----- ------- -------- ------ -- ------
Changes in equity for the six
months ended 30 June 2025: /H1118
Profit for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 ––––––– 575,476 575,476 12,359 587,835
Other comprehensive income /H1118/H1118 –––– (4,872) 144,915 – – 140,043 – 140,043
Total comprehensive income for
the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (4,872) 144,915 – 575,476 715,519 12,359 727,878----- ------- ------ ----- ----- ----- ----- ------- -------- ------ -- ------
Restricted shares vested /H1118/H1118/H1118/H1118/H111830(b) – 59,280 51,009 (59,280) –––– 51,009 – 51,009
Share options exercised /H1118/H1118/H1118/H1118/H1118/H111830(a) – (2,198) 111,340 (32,120) –––– 77,022 – 77,022
Cancellation of shares /H1118/H1118/H1118/H1118/H1118/H111831(d)(ii) (65) (5,393) 5,45 8––––––––
Equity settled share-based
payment expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 – – – 81,343 – – 3,584 – 84,927 2,717 87,644
Reduction in equity securities
designated at FVOCI /H1118/H1118/H1118/H1118/H1118/H1118 ––––– (92,980) – 92,98 0–––
Dividends approved /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(b) ––––––– (225,575) (225,575) – (225,575)
Share of changes in associates’
other reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– 38,491 – 38,491 – 38,491
(65) 51,689 167,807 (10,057) – (92,980) 42,075 (132,595) 25,874 2,717 28,591----- ------- ------ ----- ----- ----- ----- ------- -------- ------ --------
Balance at 30 June 2025 /H1118/H1118/H1118/H1118/H1118 664,059 7,806,416 (77,041) 526,523 55,595 618,679 406,376 7,239,291 17,239,898 195,348 17,435,246
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-15 –


--- page 416 ---
Attributable to equity shareholders of the Company (unaudited)
Note
Share
capital
Share
premium
Treasury
share
reserve
Share-based
payment
reserve
Exchange
reserve
Fair value
reserve
Other
reserve
Retained
earnings Total
Non-
controlling
interests Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 31(c))
(Note
31(d)(i))
(Note
31(d)(ii))
(Note
31(d)(iii))
(Note
31(d)(iv))
(Note
31(d)(v))
(Note
31(d)(vi))
Balance at 1 January 2024 /H1118/H1118/H1118/H1118 666,906 7,935,988 (293,998) 444,071 42,580 453,712 336,885 5,613,429 15,199,573 – 15,199,573----- ------- ------ ----- ----- ----- ----- ------- -------- ------ -- ------
Changes in equity for the six
months ended 30 June 2024: /H1118
Profit for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 ––––––– 517,000 517,000 – 517,000
Other comprehensive income /H1118/H1118 –––– 6,337 (105,388) 1 – (99,050) – (99,050)
Total comprehensive income for
the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 6,337 (105,388) 1 517,000 417,950 – 417,950----- ------- ------ ----- ----- ----- ----- ------- -------- ------ -- ------
Restricted shares vested /H1118/H1118/H1118/H1118/H111830(b) – 66,271 58,400 (66,271) –––– 58,400 – 58,400
Purchase of own shares /H1118/H1118/H1118/H1118/H1118/H1118 – – (104,999) ––––– (104,999) – (104,999)
Equity settled share-based
payment expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 – – – 64,75 4–––– 64,754 – 64,754
Reduction in equity securities
designated at FVOCI /H1118/H1118/H1118/H1118/H1118/H1118 ––––– (264) – 26 4–––
Share of changes in associates’
other reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– (799) – (799) – (799)
– 66,271 (46,599) (1,517) – (264) (799) 264 17,356 – 17,356----- ------- ------ ----- ----- ----- ----- ------- -------- ------ --------
Balance at 30 June 2024
(unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118666,906 8,002,259 (340,597) 442,554 48,917 348,060 336,087 6,130,693 15,634,879 – 15,634,879
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-16 –


--- page 417 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in RMB)
Y ears ended 31 December
Six months ended
30 June
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
RMB’000
Operating
activities
Profit before
taxation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,262,425 124,748 1,123,663 527,877 596,079
Adjustments for:
Depreciation and
amortisation /H1118/H1118/H11186(c) 371,753 443,681 467,339 222,983 243,959
Net loss/(gain) on
disposal of
property, plant
and equipment
and other non-
current assets /H1118/H11185 2,029 738 455 (251) 2,513
Equity-settled
share-based
payment
expenses /H1118/H1118/H1118/H1118/H11186(b) 203,181 97,138 159,034 64,754 84,060
Net gain from
financial assets
and liabilities
measured at
FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H11185 (42,718) (74,650) (23,961) (18,258) (7,736)
Interest income
from time
deposits /H1118/H1118/H1118/H1118/H1118/H1118 –––– (18,607)
Dividends from
equity
securities
designated at
FVOCI /H1118/H1118/H1118/H1118/H1118/H11185 (4,868) – (1,259) – –
Impairment loss
on property,
plant and
equipment /H1118/H1118/H1118/H1118 –––– 3,810
Impairment loss
on intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,630 – – 1,903
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-17 –


--- page 418 ---
Y ears ended 31 December
Six months ended
30 June
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
RMB’000
Impairment loss
on trade and
other
receivables /H1118/H1118/H1118 743 820 3,667 2,133 465
Impairment loss
on goodwill /H1118/H1118/H1118 241,491 373,37 2–––
Net foreign
exchange gain /H1118 (109,613) (14,578) (97,197) (6,779) 21,661
Finance costs /H1118/H1118/H11186(a) 7,889 7,115 19,253 9,313 14,087
Share of profits
less losses of
associates /H1118/H1118/H1118/H1118 3,957 4,020 7,575 2,784 10,346
Changes in working
capital:
(Increase)/decrease
in inventories /H1118 (704,957) 163,010 (267,520) 57,933 (58,061)
Decrease/(increase)
in trade and
bills
receivables /H1118/H1118/H1118 145,804 30,155 (47,454) (146,131) (25,448)
(Increase)/decrease
in prepayments
and other
current assets
and other non-
current assets /H1118/H1118 (903,018) 167,040 240,598 231,778 163,846
(Decrease)/increase
in trade
payables /H1118/H1118/H1118/H1118/H1118(163,217) 27,759 203,920 169,011 (18,088)
(Decrease)/increase
in accruals and
other payables /H1118 (3,031) (165,269) 234,457 99,175 (43,619)
Increase in
contract
liabilities /H1118/H1118/H1118/H1118/H111811,345 7,097 4,891 11,867 40,839
Cash generated
from operations /H1118 1,319,195 1,194,826 2,027,461 1,228,189 1,012,009
Income tax
(paid)/refunded /H1118/H111829(a) (369,504) (8,077) 4,769 20,527 (54,188)
Net cash generated
from operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118949,691 1,186,749 2,032,230 1,248,716 957,821--------- --------- --------- --------- ---------
APPENDIX I ACCOUNTANTS’ REPORT
– I-18 –


--- page 419 ---
Y ears ended 31 December
Six months ended
30 June
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
RMB’000
Investing activities
Payments for the
purchase of
property, plant
and equipment
and intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(550,843) (348,363) (499,018) (154,032) (412,484)
Proceeds from
disposal of
property, plant
and equipment /H1118/H1118/H1118 136 25 29,330 300 19,709
Investments in
associates /H1118/H1118/H1118/H1118/H1118/H1118 – (17,956) (91,499) (2,000) (140,000)
Investments in
equity securities
designated at
FVOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(30,000) (78,332) (1,529,668) (1,515,000) (131,848)
Proceeds from
equity securities
designated at
FVOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,711 83,609 119,597 352 175,524
Investments in
equity securities
measured at
FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(80,000) (65,612) (60,000) (60,000) –
Proceeds from
equity securities
measured at
FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 3,038
Purchase of wealth
management
products
measured at
FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,750,000) (5,465,000) (420,000) (300,000) –
Proceeds from
redemption of
wealth
management
products
measured at
FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,310,000 5,505,000 2,100,000 2,100,000 60,000
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-19 –


--- page 420 ---
Y ears ended 31 December
Six months ended
30 June
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
RMB’000
Investment income
received from
financial
instruments
measured at
FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,272 91,726 25,666 25,244 8,601
Purchase of time
deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (1,330,263)
Proceeds from
disposal of non-
current assets
recognised prior
to being acquired
by the Group /H1118/H1118/H1118/H1118 – – 27,277 – –
Loans to non-
controlling
interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (130,000) – –
Acquisition of a
subsidiary, net of
cash acquired /H1118/H1118/H111833 – – (241,020) – (15,123)
Net cash (used
in)/generated
from investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118(43,724) (294,903) (669,335) 94,864 (1,762,846)---------- -- ------- ---------- ---------- ----------
APPENDIX I ACCOUNTANTS’ REPORT
– I-20 –


--- page 421 ---
Y ears ended 31 December
Six months ended
30 June
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
RMB’000
Financing
activities
Proceeds from bank
loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823(b) – – 1,269,193 400,000 400,000
Repayment of bank
loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823(b) – – (418,699) – (678,489)
Capital element of
lease rentals
paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823(b) (31,353) (42,103) (44,299) (26,998) (27,093)
Interest element of
lease rentals
paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823(b) (6,973) (6,659) (5,558) (2,941) (2,721)
Purchase of own
ordinary shares /H1118/H1118 – (101,991) (259,564) (104,999) –
Purchase of
forfeited
restricted shares /H111823(b) (34,472) (10,292) (55,529) (49,579) –
Proceeds from share
options
exercised /H1118/H1118/H1118/H1118/H1118/H1118/H111830(a)(ii) –––– 77,022
Dividends paid /H1118/H1118/H1118/H111831(b) (707,515) (413,556) – – –
Dividends deposited
in escrow to be
distributed /H1118/H1118/H1118/H1118/H1118/H111822(a) –––– (204,642)
Expenses paid in
connection with
the proposed
initial listing of
the H shares of
the Company /H1118/H1118/H1118 –––– (6,646)
Capital injection
from non-
controlling
interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 4,500 – –
Increase in other
non-current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,00 0–––
Interest paid /H1118/H1118/H1118/H1118/H111823(b) – – (9,660) (2,802) (11,269)
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-21 –


--- page 422 ---
Y ears ended 31 December
Six months ended
30 June
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
RMB’000
Net cash (used
in)/generated
from financing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118(780,313) (572,601) 480,384 212,681 (453,838)
--------
-------- -------- -------- --------
Net increase/
(decrease) in
cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118125,654 319,245 1,843,279 1,556,261 (1,258,863)
Cash and cash
equivalents at
the beginning of
the year/period /H111823(a) 6,546,991 6,787,205 7,130,888 7,130,888 9,104,159
Effects of
exchange rate
changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118114,560 24,438 129,992 47,188 (15,619)
Cash and cash
equivalents at
the end of the
year/period /H1118/H1118/H1118/H111823(a) 6,787,205 7,130,888 9,104,159 8,734,337 7,829,677
APPENDIX I ACCOUNTANTS’ REPORT
– I-22 –


--- page 423 ---
NOTES TO THE HISTORICAL FINANCIAL INFORMATION
(Expressed in RMB unless otherwise indicated)
1 BASIS OF PREPARATION AND PRESENTATION OF THE HISTORICAL FINANCIAL
INFORMATION
GigaDevice Semiconductor Inc. (the “Company”) was incorporated in the People’s Republic of China (the
“PRC”) on 6 April 2005 as a limited liability company. On 28 December 2012, the Company was converted from a
limited liability company into a joint stock limited liability company, and was listed on Shanghai Stock Exchange
on 18 August 2016.
During the Track Record Period, the Company and its subsidiaries (the “Group”) are principally engaged in
the design, research and development, and sales of specialty memory chips, micro-control units, sensor chips, analog
chips, and complete set of systems and solutions.
The financial statements of the Company and the subsidiaries of the Group for which there are statutory
requirements were prepared in accordance with the relevant accounting rules and regulations applicable to entities
in the countries and regions in which they were incorporated and/or established. The statutory financial statements
of the Company for the years ended 31 December 2022, 2023 and 2024 were prepared in accordance with the China
Accounting Standards for Business Enterprises issued by the Ministry of Finance of the PRC (the “CASBE”) and
were audited by Zhongxinghua Certified Public Accountants LLP (ה(౷ஷΥྫ)).
During the Track Record Period and as at the date of this report, the Company has interests in the following
principal subsidiaries:
Name of company
Place and
date of
incorporation/
establishment
Particulars
of issued/
registered and
paid-up capital
Effective percentage
of equity interests
Principal activities Auditors
Held
by the
Group
Held
by the
Company
Held
by a
subsidiary
GigaDevice
Semiconductor
(HK) Ltd. (iii) /H1118/H1118/H1118
Hong Kong
4 August 2008
6,560,000 shares 100.00% 100.00% – Sales of chips 2022-2024: Cheng &
Cheng Zhongxinghua
CPA Limited
Suzhou XySemi
Electronic
Technology Co., Ltd.
ҦϞ
ʮ̡ (“XySemi”)
(Note 33) (i) (ii) /H1118/H1118/H1118
Chinese Mainland
27 February
2009
RMB57,779,499 38.07% 38.07% – Research and
development and
sales of chips
2022-2023: N/A, 2024:
Zhongxinghua
Certified Public
Accountants LLP ( ʕ
ה(त
౷ஷΥྫ)) (i)
Silead INC.ͭฆ
ʮ̡
(“SiLead”) (i) (ii) /H1118/H1118
Chinese Mainland
27 January 2011
RMB160,000,000 100.00% 100.00% – Research and
development and
sales of chips
2022-2024:
Zhongxinghua
Certified Public
Accountants LLP ( ʕ
ה(त
౷ஷΥྫ)) (i)
GigaDevice
Semiconductor
(Shanghai) Inc.
ʮ
̡ (i) (ii) /H1118/H1118/H1118/H1118/H1118/H1118
Chinese Mainland
16 February
2012
RMB100,000,000 100.00% 100.00% – Research and
development and
sales of chips
2022-2024:
Zhongxinghua
Certified Public
Accountants LLP ( ʕ
ה(त
౷ஷΥྫ)) (i)
GigaDevice V enture
Capital߅
ʮ̡ (i)
(ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Chinese Mainland
22 July 2013
RMB220,000,000 100.00% 100.00% – Investment holding 2022-2024:
Zhongxinghua
Certified Public
Accountants LLP ( ʕ
ה(त
౷ஷΥྫ)) (i)
GigaDevice
Semiconductor
(Hefei) Inc.׸ࣸ٭
ʮ̡ (i)
(ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Chinese Mainland
13 March 2014
RMB49,614,178 100.00% 100.00% – Technology
development and
sales of chips
2022-2024:
Zhongxinghua
Certified Public
Accountants LLP ( ʕ
ה(त
౷ஷΥྫ)) (i)
APPENDIX I ACCOUNTANTS’ REPORT
– I-23 –


--- page 424 ---
Name of company
Place and
date of
incorporation/
establishment
Particulars
of issued/
registered and
paid-up capital
Effective percentage
of equity interests
Principal activities Auditors
Held
by the
Group
Held
by the
Company
Held
by a
subsidiary
Gigadevice
Semiconductor
(Xi’an) Inc.׸ࣸ
ʮ
̡ (i) (ii) /H1118/H1118/H1118/H1118/H1118/H1118
Chinese Mainland
24 November
2017
RMB20,000,000 100.00% 100.00% – Technology
development and
sales of chips
2022-2024:
Zhongxinghua
Certified Public
Accountants LLP ( ʕ
ה(त
౷ஷΥྫ)) (i)
GigaDevice
Semiconductor
Singapore PTE. Ltd.
(iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Singapore
23 November
2020
20,000,000 shares at
USD1 each
100.00% 100.00% – Wholesale of
electronic
components
2022-2024: FOZL
ASSURANCE PAC
XC Memory Co., Ltd.
π̒ኬ᜗
ʮ̡ (i) (ii) /H1118/H1118/H1118
Chinese Mainland
11 July 2024
RMB100,000,000 100.00% 100.00% – Technology
development and
sales of chips
2024: Zhongxinghua
Certified Public
Accountants LLP ( ʕ
ה(त
౷ஷΥྫ)) (i)
CreMemory Technology
Co., Ltd.߅
ʮ̡ (i) (ii) /H1118/H1118
Chinese Mainland
31 July 2024
Registered capital of
RMB27,000,000
and paid-up capital of
RMB25,500,000
77.78% 77.78% – Technology
development and
sales of chips
2024: Zhongxinghua
Certified Public
Accountants LLP ( ʕ
ה(त
౷ஷΥྫ)) (i)
Notes:
(i) These entities’ official names are in Chinese. The English translations of these entities’ names are for
identification only.
(ii) These entities are limited liability companies in Chinese Mainland.
(iii) These entities are limited liability companies outside Chinese Mainland.
All entities comprising the Group have adopted 31 December as their financial year end date, except that a
subsidiary established in the UK has adopted 31 March as its financial year.
The Historical Financial Information has been prepared in accordance with all applicable IFRS Accounting
Standards as issued by the International Accounting Standards Board (the “IASB”). Further details of the material
accounting policy information are set out in Note 2.
The IASB has issued a number of new and revised IFRS Accounting Standards. For the purpose of preparing
the Historical Financial Information, the Group has adopted all applicable new and revised IFRS Accounting
Standards to the Track Record Period, except for any new standards or interpretations that are not yet effective for
the Track Record Period. The revised and new accounting standards and interpretations issued but not yet effective
for the Track Record Period are set out in Note 38.
The Historical Financial Information also complies with the applicable disclosure provisions of the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
The accounting policies set out below have been applied consistently to all periods presented in the Historical
Financial Information.
The Stub Period Corresponding Financial Information has been prepared in accordance with the same basis of
preparation and presentation adopted in respect of the Historical Financial Information.
The Historical Financial Information and the Stub Period Corresponding Financial Information is presented in
RMB and all values are rounded to the nearest thousand (RMB’000) except when otherwise indicated.
APPENDIX I ACCOUNTANTS’ REPORT
– I-24 –


--- page 425 ---
2 MATERIAL ACCOUNTING POLICY INFORMATION
(a) Basis of measurement
The measurement basis used in the preparation of the Historical Financial Information is the historical cost
basis except that the following assets and liabilities are stated at their fair values as explained in the accounting
policies set out below:
 financial assets and liabilities measured at FVPL (see Note 2(f))
 equity securities designated at FVOCI (see Note 2(f))
(b) Use of estimates and judgements
The preparation of the Historical Financial Information in conformity with IFRS Accounting Standards
requires management to make judgements, estimates and assumptions that affect the application of policies and
reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be reasonable under the circumstances, the results
of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in
the period of the revision and future periods if the revision affects both current and future periods.
Judgements made by management in the application of IFRS Accounting Standards that have significant effect
on the Historical Financial Information and major sources of estimation uncertainty are discussed in Note 3.
(c) Subsidiaries and non-controlling interests
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. The financial statements of subsidiaries are included in the Historical Financial Information
from the date on which control commences until the date on which control ceases.
Intra-group balances and transactions, and any unrealised income and expenses (except for foreign currency
transaction gains or losses) arising from intra-group transactions, are eliminated. Unrealised losses resulting from
intra-group transactions are eliminated in the same way as unrealised gains, but only to the extent that there is no
evidence of impairment.
For each business combination, the Group can elect to measure any non-controlling interests (“NCI”) either
at fair value or the NCI’s proportionate share of the subsidiary’s net identifiable assets. NCI are presented in the
consolidated statement of financial position within equity, separately from equity attributable to the equity
shareholders of the Company. NCI in the results of the Group are presented on the face of the consolidated statement
of profit or loss and other comprehensive income as an allocation of the total profit or loss and total comprehensive
income for the year between NCI and the equity shareholders of the Company.
Changes in the Group’s interests in a subsidiary that do not result in a loss of control are accounted for as
equity transactions.
When the Group loses control of a subsidiary, it derecognises the assets and liabilities of the subsidiary, and
any related NCI and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest
retained in that former subsidiary is measured at fair value when control is lost.
In the Company’s statement of financial position, an investment in a subsidiary is stated at cost less impairment
losses (see Note 2(j)(ii)) unless it is classified as held for sale.
APPENDIX I ACCOUNTANTS’ REPORT
– I-25 –


--- page 426 ---
(d) Associates
An associate is an entity in which the Group or the Company has significant influence, but not control or joint
control, over the financial and operating policies.
An interest in an associate is accounted for using the equity method, unless it is classified as held for sale. They
are initially recognised at cost, which includes transaction costs. Subsequently, the Historical Financial Information
includes the Group’s share of the profit or loss and other comprehensive income (“OCI”) of those investees, until the
date on which significant influence ceases.
When the Group’s share of losses exceeds its interest in the associate, the Group’s interest is reduced to nil
and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive
obligations or made payments on behalf of the investee. For this purpose, the Group’s interest is the carrying amount
of the investment under the equity method, together with any other long-term interests that in substance form part
of the Group’s net investment in the associate, after applying the ECL model to such other long-term interests where
applicable (see Note 2(j)(i)).
Unrealised gains arising from transactions with equity-accounted investees are eliminated against the
investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as
unrealised gains, but only to the extent there is no evidence of impairment.
In the Company’s statement of financial position, an investment in an associate is accounted for using the
equity method, unless it is classified as held for sale.
(e) Goodwill
Goodwill arising on acquisition of businesses is measured at cost less accumulated impairment losses and is
tested annually for impairment (see Note 2(j)(ii)).
(f) Other investments
The Group’s policies for investments in securities, other than investments in subsidiaries, associates and joint
ventures, are set out below.
Investments in securities are recognised/derecognised on the date the Group commits to purchase/sell the
investment. The investments are initially stated at fair value plus directly attributable transaction costs, except for
those investments measured at FVPL for which transaction costs are recognised directly in profit or loss. For an
explanation of how the Group determines fair value of financial instruments, see Note 32(e). These investments are
subsequently accounted for as follows, depending on their classification.
(i) Non-equity investments
Non-equity investments are mainly wealth management products and private equity funds, and are measured
at FVPL. Changes in the fair value of the investment (including interest) are recognised in profit or loss.
(ii) Equity investments
An investment in equity securities is classified as FVPL, unless the investment is not held for trading purposes
and on initial recognition the Group makes an irrevocable election to designate the investment at FVOCI
(non-recycling) such that subsequent changes in fair value are recognised in OCI. Such elections are made on an
instrument-by-instrument basis, but may only be made if the investment meets the definition of equity from the
issuer’s perspective. If such election is made for a particular investment, at the time of disposal, the amount
accumulated in the fair value reserve (non-recycling) is transferred to retained earnings and not recycled through
profit or loss. Dividends from an investment in equity securities, irrespective of whether classified as at FVPL or
FVOCI, are recognised in profit or loss as other income (see Note 2(s)(ii)(a)).
(iii) Derivative financial instruments
The Group holds derivative financial instruments to manage its foreign currency risk. Derivatives are initially
measured at fair value and subsequently are measured at fair value with changes therein recognised in profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
– I-26 –


--- page 427 ---
(g) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated
impairment losses (see Note 2(j)(ii)).
If significant parts of an item of property, plant and equipment have different useful lives, then they are
accounted for as separate items (major components).
Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.
Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated
residual values, if any, using the straight line method over their estimated useful lives, and is generally recognised
in profit or loss, as follows:
– Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810-35 years
– Machinery and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183-10 years
– Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 years
– Leasehold improvements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118over the term of leases
– Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183-5 years
Depreciation methods, useful lives and residual values are reviewed annually and adjusted if appropriate.
(h) Intangible assets (other than goodwill)
Expenditure on research activities is recognised in profit or loss as incurred. Development expenditure is
capitalised only if the expenditure can be measured reliably, the product or process is technically and commercially
feasible, future economic benefits are probable and the Group intends to and has sufficient resources to complete
development and to use or sell the resulting asset. Otherwise, it is recognised in profit or loss as incurred. Capitalised
development expenditure is measured at cost less any accumulated impairment losses until it is ready for intended
use in which it will be reclassified as patents and proprietary technologies. Development expenditure is tested
annually for impairment (see Note 2(j)(ii)).
Other intangible assets, including patents and proprietary technologies, which have finite useful lives are
measured at cost less accumulated amortisation and any accumulated impairment losses (see Note 2(j)(ii)).
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using
the straight-line method over their estimated useful lives, if any, and is generally recognised in profit or loss, as
follows:
– Patents and proprietary technologies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182-8 years
– Software and others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183-5 years
Amortisation methods, useful lives and residual values are reviewed annually and adjusted if appropriate.
(i) Leased assets
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. This is the case if
the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. Control is conveyed where the customer has both the right to direct the use of the identified asset and
to obtain substantially all of the economic benefits from that use.
As a lessee
Where the contract contains lease component(s) and non-lease component(s), the Group has elected not
to separate non-lease components and accounts for each lease component and any associated non-lease
components as a single lease component for all leases.
At the lease commencement date, the Group recognises a right-of-use asset and a lease liability, except
for leases that have a short lease term of 12 months or less, and leases of low-value items. When the Group
enters into a lease in respect of a low-value item, the Group decides whether to capitalise the lease on a
lease-by-lease basis. If not capitalised, the associated lease payments are recognised in profit or loss on a
systematic basis over the lease term.
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Where the lease is capitalised, the lease liability is initially recognised at the present value of the lease
payments payable over the lease term, discounted using the interest rate implicit in the lease or, if that rate
cannot be readily determined, using a relevant incremental borrowing rate. After initial recognition, the lease
liability is measured at amortised cost and interest expense is recognised using the effective interest method.
V ariable lease payments that do not depend on an index or rate are not included in the measurement of the lease
liability, and are charged to profit or loss as incurred.
The right-of-use asset recognised when a lease is capitalised is initially measured at cost, which
comprises the initial amount of the lease liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove
the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives
received. The right-of-use asset is subsequently stated at cost less accumulated depreciation and impairment
losses (see Note 2(j)(ii)). Depreciation is calculated using the straight-line method over the term of leases.
The lease liability is remeasured when there is a change in future lease payments arising from a change
in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under
a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase,
extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment
is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount
of the right-of-use asset has been reduced to zero.
The lease liability is also remeasured when there is a lease modification, which means a change in the
scope of a lease or the consideration for a lease that is not originally provided for in the lease contract, if such
modification is not accounted for as a separate lease. In this case, the lease liability is remeasured based on
the revised lease payments and lease term using a revised discount rate at the effective date of the modification.
In the consolidated statement of financial position, the current portion of long-term lease liabilities is
determined as the principal portion of contractual payments that are due to be settled within twelve months
after the reporting period.
(j) Credit losses and impairment of assets
(i) Credit losses from financial instruments
The Group recognises a loss allowance for expected credit losses (“ECLs”) on financial assets measured at
amortised cost (including cash at bank and on hand, trade and bills receivables and other receivables).
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Generally, credit losses are measured as the
present value of all expected cash shortfalls between the contractual and expected amounts.
The expected cash shortfall for fixed-rate financial assets and trade and other receivables are discounted
using the effective interest rate determined at initial recognition or an approximation thereof.
The maximum period considered when estimating ECLs is the maximum contractual period over which
the Group is exposed to credit risk.
ECLs are measured on either of the following bases:
– 12-month ECLs: these are the portion of ECLs that result from default events that are possible
within the 12 months after the reporting date (or a shorter period if the expected life of the
instrument is less than 12 months); and
– lifetime ECLs: these are the ECLs that result from all possible default events over the expected
lives of the items to which the ECL model applies.
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The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following,
which are measured at 12-months ECLs:
– financial instruments that are determined to have low credit risk at the reporting date; and
– other financial instruments for which credit risk (i.e. the risk of default occurring over the
expected life of the financial instrument) has not increased significantly since initial recognition.
Loss allowances for trade and bills receivables are always measured at an amount equal to lifetime
ECLs.
Significant increases in credit risk
When determining whether the credit risk of a financial instrument has increased significantly since
initial recognition and when measuring ECLs, the Group considers reasonable and supportable information that
is relevant and available without undue cost or effort. This includes both quantitative and qualitative
information and analysis, based on the Group’s historical experience and informed credit assessment, that
includes forward-looking information.
The Group assumes that the credit risk on a financial asset has increased significantly if it is past due.
The Group considers a financial asset to be in default when the debtor is unlikely to pay its credit
obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is
held).
Depending on the nature of the financial instruments, the assessment of a significant increase in credit
risk is performed on either an individual basis or a collective basis. When the assessment is performed on a
collective basis, the financial instruments are grouped based on shared credit risk characteristics, such as past
due status and credit risk ratings.
ECLs are remeasured at each reporting date to reflect changes in the financial instrument’s credit risk
since initial recognition. Any change in the ECL amount is recognised as an impairment gain or loss in profit
or loss. The Group recognises an impairment gain or loss for all financial instruments with a corresponding
adjustment to their carrying amounts through a loss allowance account.
Credit-impaired financial assets
At each reporting date, the Group assesses whether a financial asset is credit-impaired. A financial asset
is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows
of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable events:
– significant financial difficulties of the debtor;
– a breach of contract, such as a default or being past due;
– the restructuring of a loan or advance by the Group on terms that the Group would not consider
otherwise;
– it is probable that the debtor will enter bankruptcy or other financial reorganisation; or
– the disappearance of an active market for a security because of financial difficulties of the issuer.
Write-off policy
The gross carrying amount of a financial asset is written off to the extent that there is no realistic
prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets
or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off.
Subsequent recoveries of an asset that was previously written off are recognised as a reversal of
impairment in profit or loss in the period in which the recovery occurs.
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(ii) Impairment of other non-current assets
At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than
inventories and deferred tax assets) to determine whether there is any indication of impairment. If any such indication
exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units
(“CGUs”). Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected
to benefit from the synergies of the combination.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs of
disposal. V alue in use is based on the estimated future cash flows, discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset
or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.
Impairment losses are recognised in profit or loss. They are allocated first to reduce the carrying amount of
any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro
rata basis.
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only
to the extent that the resulting carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.
(k) Inventories
Inventories are assets which are held for sale in the ordinary course of business, in the process of production
for such sale or in the form of materials or supplies to be consumed in the production process or in the rendering of
services.
Inventories are carried at the lower of cost and net realisable value.
Cost is calculated using the weighted average cost formula and comprises all costs of purchase, costs of
conversion and other costs incurred in bringing the inventories to their present location and condition.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs
of completion and the estimated costs necessary to make the sale.
(l) Contract liabilities
A contract liability is recognised when the customer pays non-refundable consideration before the Group
recognises the related revenue (see Note 2(s)(i)). A contract liability is also recognised if the Group has an
unconditional right to receive non-refundable consideration before the Group recognises the related revenue. In such
latter cases, a corresponding receivable is also recognised (see Note 2(m)).
(m) Trade and other receivables
A receivable is recognised when the Group has an unconditional right to receive consideration and only the
passage of time is required before payment of that consideration is due.
Trade receivables that do not contain a significant financing component are initially measured at their
transaction price. Trade receivables that contain a significant financing component and other receivables are initially
measured at fair value plus transaction costs. All receivables are subsequently stated at amortised cost (see Note
2(j)(i)).
(n) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and other financial
institutions, and other short-term, highly liquid investments that are readily convertible into known amounts of cash
and which are subject to an insignificant risk of changes in value. Cash and cash equivalents are assessed for ECL
(see Note 2(j)(i)).
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(o) Trade and other payables
Trade and other payables are initially recognised at fair value. Subsequent to initial recognition, trade and other
payables are stated at amortised cost using the effective interest method unless the effect of discounting would be
immaterial, in which case they are stated at invoice amounts.
(p) Interest-bearing borrowings
Interest-bearing borrowings are measured initially at fair value less transaction costs. Subsequently, these
borrowings are stated at amortised cost using the effective interest method. Interest expense is recognised in
accordance with Note 2(u).
(q) Employee benefits
(i) Short-term employee benefits and contributions to defined contribution retirement plans
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the
amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result
of past service provided by the employee and the obligation can be estimated reliably.
Obligations for contributions to defined contribution retirement plans are provided under the relevant local
regulations and are expensed as the related service is provided.
(ii) Share-based payments
The grant-date fair value of share option granted to employees is measured using valuation model. The
grant-date fair value of restricted share granted to employees is equal to the closing price of the Company’s publicly
trading shares on grant date. The amount is generally recognised as an expense, with a corresponding increase in
equity, over the vesting period of the awards. The amount recognised as an expense is adjusted to reflect the number
of awards for which the related service conditions are expected to be met, such that the amount ultimately recognised
is based on the number of awards that meet the related service conditions at the vesting date.
(iii) Termination benefits
Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those
benefits and when the Group recognises costs for a restructuring.
(r) Income tax
Income tax expense comprises current tax and deferred tax. It is recognised in profit or loss except to the extent
that it relates to a business combination, or items recognised directly in equity or in OCI.
Current tax comprises the estimated tax payable or receivable on the taxable income or loss for the year and
any adjustments to the tax payable or receivable in respect of previous years. The amount of current tax payable or
receivable is the best estimate of the tax amount expected to be paid or received that reflects any uncertainty related
to income taxes. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also
includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are met.
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Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised
for:
– temporary differences on the initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit or loss and does not give rise
to equal taxable and deductible temporary differences;
– temporary differences related to investment in subsidiaries and associates to the extent that the Group
is able to control the timing of the reversal of the temporary differences and it is probable that they will
not reverse in the foreseeable future;
– taxable temporary differences arising on the initial recognition of goodwill; and
– those related to the income taxes arising from tax laws enacted or substantively enacted to implement
the Pillar Two model rules published by the Organisation for Economic Co-operation and Development.
The Group recognised deferred tax assets and deferred tax liabilities separately in relation to its lease liabilities
and right-of-use assets.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary
differences to the extent that it is probable that future taxable profits will be available against which they can be used.
Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount
of taxable temporary differences is insufficient to recognise a deferred tax asset in full, then future taxable profits,
adjusted for reversals of existing temporary differences, are considered, based on the business plans for individual
subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that
it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability
of future taxable profits improves.
Deferred tax assets and liabilities are offset only if certain criteria are met.
(s) Revenue and other income
Income is classified by the Group as revenue when it arises from the sale of goods and the provision of services
in the ordinary course of the Group’s business.
Further details of the Group’s revenue and other income recognition policies are as follows:
(i) Revenue from contracts with customers
Revenue is recognised when control over a product or service is transferred to the customer at the amount of
promised consideration to which the Group is expected to be entitled, excluding those amounts collected on behalf
of third parties such as value added tax or other sales taxes.
Further details of the Group’s revenue recognition policies are as follows:
(a) Revenue from sale of goods
The Group’s sales contracts with customers of specialty memory chips, micro-control units, sensor chips
and analog chips contain various delivery terms. Depending on the delivery terms, control of these goods is
generally transferred to customers upon delivery of these goods to and acceptance of these goods by the
customers or the designated recipients by the customers, at which point the Group recognises revenue.
(b) Revenue from rendering of services
The Group’s revenue from rendering of services is generated from the provision of technical support
service in the development of specialty memory chips, micro-control units, sensor chips and analog chips.
Revenue is recognised when the service is provided to and confirmed by the customers.
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(ii) Revenue from other sources and other income
(a) Dividends
Dividend income is recognised in profit or loss on the date on which the Group’s right to receive
payment is established.
(b) Interest income
Interest income is recognised using the effective interest method. The effective interest rate is the rate
that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross
carrying amount of the financial asset. In calculating interest income, the effective interest rate is applied to
the gross carrying amount of the asset (when the asset is not credit-impaired). However, for financial assets
that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying
the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired,
then the calculation of interest income reverts to the gross basis.
(c) Government grants
Government grants are recognised in the statement of financial position initially when there is
reasonable assurance that they will be received and that the Group will comply with the conditions attaching
to them.
Grants that compensate the Group for expenses incurred are recognised as other income in profit or loss
on a systematic basis in the same periods in which the expenses are incurred.
Grants that compensate the Group for the cost of an asset is recognised as deferred income in the
statement of financial position and amortised over the useful life of the related asset, and is recognised as other
income.
(t) Translation of foreign currencies
Transactions in foreign currencies are translated into the respective functional currencies of group companies
at the exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency
at the exchange rates at the reporting date. Non-monetary assets and liabilities that are measured based on historical
cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency
differences are generally recognised in profit or loss.
The assets and liabilities of foreign operations are translated into RMB, the Group’s presentation currency, at
the exchange rates at the reporting date. The income and expenses of foreign operations are translated into RMB at
the exchange rates at the dates of the transactions. Foreign currency differences are recognised in OCI and
accumulated in the exchange reserve, except to the extent that the translation difference is allocated to NCI.
(u) Borrowing costs
Borrowing costs are expensed in the period in which they are incurred.
(v) Provisions and contingent liabilities
Generally provisions are determined by discounting the expected future cash flows at a pretax rate that reflects
current market assessment of the time value of money and the risks specific to the liability.
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be
estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic
benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence
of one or more future events are also disclosed as contingent liabilities unless the probability of outflow of economic
benefits is remote.
APPENDIX I ACCOUNTANTS’ REPORT
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(w) Related parties
(a) A person, or a close member of that person’s family, is related to the Group if that person:
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or the Group’s parent.
(b) An entity is related to the Group if any of the following conditions applies:
(i) The entity and the Group are members of the same group.
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of
a member of a group of which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.
(v) The entity is a post-employment benefit plan for the benefit of employees of either the Group or
an entity related to the Group.
(vi) The entity is controlled or jointly controlled by a person identified in (a).
(vii) A person identified in (a)(i) has significant influence over the entity or is a member of the key
management personnel of the entity (or of a parent of the entity).
(viii) The entity, or any member of a group of which it is a part, provides key management personnel
services to the Group or to the Group’s parent.
Close members of the family of a person are those family members who may be expected to influence, or be
influenced by, that person in their dealings with the entity.
(x) Segment reporting
Operating segments, and the amounts of each segment item reported in the Historical Financial Information,
are identified from the financial information provided regularly to the Group’s most senior executive management
for the purposes of allocating resources to, and assessing the performance of, the Group’s various lines of business
and geographical locations.
Individually material operating segments are not aggregated for financial reporting purposes unless the
segments have similar economic characteristics and are similar in respect of the nature of products and services, the
nature of production processes, the type or class of customers, the methods used to distribute the products or provide
the services, and the nature of the regulatory environment. Operating segments which are not individually material
may be aggregated if they share a majority of these criteria.
3 ACCOUNTING JUDGEMENTS AND ESTIMATES
Notes 15, 30 and 32(e) contain information about the assumptions and their risk factors relating to goodwill
impairment, fair value of share-based payments and financial instruments, respectively. Other significant sources of
estimation uncertainty are as follows:
Impairment of non-current non-financial assets
If circumstances indicate that the carrying amount of a non-current non-financial asset may not be recoverable,
the asset may be considered “impaired”, and an impairment loss may be recognised in accordance with accounting
policy for impairment of non-current assets as described in Note 2(j)(ii). These assets are tested for impairment
periodically or whenever the events or changes in circumstances indicate that their recorded carrying amounts may
not be recoverable. When such a decline has occurred, the carrying amount is reduced to recoverable amount. The
APPENDIX I ACCOUNTANTS’ REPORT
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recoverable amount is the greater of the fair value less costs of disposal and value in use. In determining the value
in use, expected future cash flows generated by the asset are discounted to their present value, which requires
significant judgment relating to the level of revenue and amount of operating costs. The Group uses all readily
available information in determining an amount that is a reasonable approximation of the recoverable amount,
including estimates based on reasonable and supportable assumptions and projections of the level of revenue and
amount of operating costs. Changes in these estimates could have a significant impact on the recoverable amount of
the assets and could result in additional impairment charge or reversal of impairment in future periods.
4 REVENUE AND SEGMENT REPORTING
The principal activities of the Group are the design, research and development, and sales of specialty memory
chips, micro-control units, sensor chips, analog chips, and complete set of systems and solutions.
(a) Revenue
(i) Disaggregation of revenue
Disaggregation of revenue from contracts with customers by major products or service lines is as follows:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
RMB’000
Revenue from contracts
with customers within
the scope of IFRS 15
Disaggregated by major
products or service
lines:
– Specialty memory chips /H1118 4,825,856 4,077,311 5,194,173 2,604,520 2,844,934
– Micro-control units /H1118/H1118/H1118/H11182,825,357 1,312,209 1,690,547 802,115 959,106
– Sensor chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118434,974 352,449 448,300 192,173 193,193
– Analog chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,851 4,604 15,468 3,098 152,276
– Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,954 14,250 7,490 7,131 800
8,129,992 5,760,823 7,355,978 3,609,037 4,150,309
During the Track Record Period, the Group’s revenue was substantially recognised at a point in time.
The Group’s customer base is diversified and no customer with whom transactions have exceeded 10% of the
Group’s revenue for the years ended 31 December 2022, 2023 and 2024 and the six months ended 30 June 2024
(unaudited) and 2025. Details of concentrations of credit risk are set out in Note 32(a).
(ii) Revenue expected to be recognised in the future arising from contracts with customers in existence at the
reporting date
The Group takes advantage of the practical expedient in paragraph 121 of IFRS 15 and does not disclose the
remaining performance obligation as substantially all of the Group’s sale contracts have an original expected duration
of less than 1 year, except for sale contracts with expected duration of more than one year of RMBNil, RMBNil,
RMBNil and RMB131,706,000 as at 31 December 2022, 2023 and 2024 and 30 June 2025, respectively, to be
recognised in future.
(b) Segment reporting
(i) Segment results
IFRS 8, Operating Segments , requires identification and disclosure of operating segment information based on
internal financial reports that are regularly reviewed by the Group’s chief operating decision maker for the purpose
of resources allocation and performance assessment. On this basis, as for the purpose of making decisions about
resources allocation and performance assessment, the Group’s management reviews the operating results of the Group
as a whole by products and services and the Group has determined that it only has one operating segment during the
Track Record Period.
APPENDIX I ACCOUNTANTS’ REPORT
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Disaggregation of revenue from contracts with customers by major products along with gross profit or loss as
provided to the Group’s management for the purposes of resource allocation and performance assessment of products
and services for the Track Record Period is set out below:
Y ear ended 31 December 2022
Specialty
memory
chips
Micro-
control units Sensor chips Analog chips Others
Less:
write-down
of inventories
recognised Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H11184,825,856 2,825,357 434,974 3,851 39,954 – 8,129,992
Gross profit/(loss) /H11181,934,749 1,833,903 71,168 959 33,857 (177,420) 3,697,216
Y ear ended 31 December 2023
Specialty
memory
chips
Micro-
control units Sensor chips Analog chips Others
Less:
write-down
of inventories
recognised Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H11184,077,311 1,312,209 352,449 4,604 14,250 – 5,760,823
Gross profit/(loss) /H11181,344,959 569,404 56,382 (1,923) 14,193 (236,707) 1,746,308
Y ear ended 31 December 2024
Specialty
memory
chips
Micro-
control units Sensor chips Analog chips Others
Less:
write-down
of inventories
recognised Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H11185,194,173 1,690,547 448,300 15,468 7,490 – 7,355,978
Gross profit/(loss) /H11182,091,500 621,085 73,797 1,628 7,343 (172,135) 2,623,218
Six months ended 30 June 2025
Specialty
memory
chips
Micro-
control units Sensor chips Analog chips Others
Less:
write-down
of inventories
recognised Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H11182,844,934 959,106 193,193 152,276 800 – 4,150,309
Gross profit/(loss) /H11181,095,377 357,879 30,941 59,361 775 (11,607) 1,532,726
Six months ended 30 June 2024 (unaudited)
Specialty
memory
chips
Micro-
control units Sensor chips Analog chips Others
Less:
write-down
of inventories
recognised Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H11182,604,520 802,115 192,173 3,098 7,131 – 3,609,037
Gross profit/(loss) /H11181,022,009 309,217 38,340 465 7,035 (76,867) 1,300,199
APPENDIX I ACCOUNTANTS’ REPORT
– I-36 –


--- page 437 ---
(ii) Geographic information
Information about the Group’s revenue from external customers, presented based on their location of
registration, is as follows:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
RMB’000
Chinese Mainland /H1118/H1118/H1118/H1118/H1118/H11181,663,528 1,331,795 1,923,578 912,620 1,265,554
Hong Kong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,343,530 2,915,429 3,374,412 1,690,814 1,852,330
Taiwan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118971,430 892,786 1,177,028 555,400 616,093
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,151,504 620,813 880,960 450,203 416,332
8,129,992 5,760,823 7,355,978 3,609,037 4,150,309
The non-current assets of the Group are substantially located or allocated to operations in Chinese Mainland.
5 OTHER INCOME
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
RMB’000
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118157,427 238,622 334,447 138,595 147,382
Net gain from financial
assets and liabilities
measured at FVPL /H1118/H1118/H1118/H111842,718 74,650 23,961 18,258 7,736
Dividends from equity
securities designated
at FVOCI (Note 18(a)) /H1118 4,868 – 1,259 – –
Government grants /H1118/H1118/H1118/H1118/H111876,260 72,319 51,589 27,505 27,123
Net gain on foreign
exchange differences /H1118/H1118/H1118194,884 29,134 130,595 49,741 15,238
Net (loss)/gain on disposal
of property, plant and
equipment and other
non-current assets /H1118/H1118/H1118/H1118(2,029) (738) (455) 251 (2,513)
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,172 10,414 8,518 5,760 4,778
519,300 424,401 549,914 240,110 199,744
6 PROFIT BEFORE TAXATION
Profit before taxation is arrived at after charging:
(a) Finance costs
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
RMB’000
Interest on bank loans /H1118/H1118/H1118 – – 9,633 2,802 11,112
Interest on lease liabilities /H1118 6,973 6,659 5,558 2,941 2,721
Interest on unvested
restricted shares
repurchase obligation /H1118/H1118 916 456 4,062 3,570 254
7,889 7,115 19,253 9,313 14,087
APPENDIX I ACCOUNTANTS’ REPORT
– I-37 –


--- page 438 ---
(b) Staff costs
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
RMB’000
Salaries, wages and other
benefits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118816,484 786,813 1,078,794 579,232 647,023
Contributions to defined
contribution retirement
schemes (Note) /H1118/H1118/H1118/H1118/H1118/H111850,978 66,447 78,573 37,700 43,974
Equity-settled share-based
payment expenses
(Note 30) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118203,181 97,138 159,034 64,754 84,060
1,070,643 950,398 1,316,401 681,686 775,057
Note:
Employees of the Company and its subsidiaries established in Chinese Mainland are required to participate in
defined contribution retirement schemes administered and operated by the respective local municipal
governments. The Group contributes funds which are calculated on certain percentages of the average
employee salary as agreed by the respective local municipal governments to the schemes as retirement benefits
for the employees.
The subsidiaries of the Group incorporated in Hong Kong are required to make contributions to the Mandatory
Provident Funds under the Hong Kong Mandatory Provident Fund Schemes Ordinance.
All other overseas subsidiaries of the Group are subject to the statutory enterprise contribution retirements
schemes under the laws and regulations of the respective countries/jurisdictions.
The Group has no further material obligation for payment of other retirement benefits beyond the above
contributions.
(c) Other items
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Cost of inventories #
(Note 20(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,388,065 4,000,904 4,680,587 2,299,579 2,598,559
Depreciation charges: #
– property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118219,446 276,785 283,815 139,972 133,517
– right-of-use assets /H1118/H1118/H1118/H1118/H111837,043 42,499 44,402 22,082 27,945
Amortisation of intangible
assets # /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118115,264 124,397 139,122 60,929 82,497
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 5 6 3
# Cost of inventories includes RMB73,873,000, RMB117,146,000, RMB132,650,000, RMB67,461,000
(unaudited) and RMB77,298,000 for the years ended 31 December 2022, 2023 and 2024 and the six
months ended 30 June 2024 (unaudited) and 2025, respectively, relating to depreciation and
amortisation charges, which amount is also included in the respective total amounts disclosed separately
above for each of these types of expenses.
APPENDIX I ACCOUNTANTS’ REPORT
– I-38 –


--- page 439 ---
7 INCOME TAX IN THE CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
(a) Taxation in the consolidated statements of profit or loss and other comprehensive income represent:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
RMB’000
Current tax – Chinese
Mainland (Note 29(a))
Provision for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118252,132 17,272 42,780 2,978 5,117
Under/(over)-provision in
respect of prior
years/periods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,072 (2,822) 2,345 2,118 595
255,204 14,450 45,125 5,096 5,712
Current tax – Overseas
(Note 29(a))
Provision for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,171 2,283 1,097 2,915 8,955
256,375 16,733 46,222 8,011 14,667
Deferred tax (Note
29(b)(i))
Origination and reversal of
temporary differences /H1118/H1118 (46,832) (53,126) (23,440) 2,866 (6,423)
209,543 (36,393) 22,782 10,877 8,244
(b) Reconciliations between tax expenses and accounting profits at applicable tax rates
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
RMB’000
Profit before taxation /H1118/H1118/H1118/H11182,262,425 124,748 1,123,663 527,877 596,079
Tax on profit before
taxation, calculated at
the rates applicable to
profits in the
jurisdictions concerned
(Note (i)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118568,020 12,930 269,755 131,969 141,162
Tax effect of non-taxable
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(244) (11,287) (17,669) (8,629) (5,870)
Tax effect of non-
deductible expenses /H1118/H1118/H111848,853 44,829 11,509 2,133 560
Tax rates differentials
(Notes (ii) and (iii)) /H1118/H1118/H1118(358,682) 13,505 (135,174) (60,521) (66,594)
Tax effect of additional
deduction for research
and development
expenses (Notes (ii) and
(iii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(70,031) (95,661) (102,163) (64,097) (52,185)
Tax effect of unrecognised
unused tax losses and
deductible temporary
differences /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,555 2,113 (5,821) 7,904 (9,424)
Under/(over)-provision in
respect of prior
years/periods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,072 (2,822) 2,345 2,118 595
209,543 (36,393) 22,782 10,877 8,244
APPENDIX I ACCOUNTANTS’ REPORT
– I-39 –


--- page 440 ---
Notes:
(i) Entities of the Group established in Chinese Mainland were subject to the PRC Corporate Income Tax
rate of 25% during the Track Record Period.
The provision for Hong Kong Profits Tax for the Track Record Period was calculated at 16.5% of the
estimated assessable profits for the year. During the Track Record Period, a subsidiary of the Group was
under the two-tiered profits tax rate regime, i.e. the first Hong Kong Dollars (“HK$”) 2,000,000 of
assessable profits were taxed at 8.25% and the remaining assessable profits were taxed at 16.5%.
Taxation for subsidiaries incorporated in other jurisdictions is calculated at the applicable income tax
rates in the relevant countries.
(ii) The Company and certain subsidiaries are regarded as key enterprises in the industry. According to the
announcement on preferential corporate income tax policies for key enterprises, the Company and these
subsidiaries were subject to a preferential tax rate of 10% during the Track Record Period. The Company
and these subsidiaries were also entitled to an additional tax deductible allowance amounting to 120%
of the qualified research and development costs incurred for each of the years during the Track Record
Period.
(iii) Certain subsidiaries of the Group obtained the certificates of “High and New Technology Enterprise”
(“HNTE”) from the tax authorities and were subject to a preferential tax rate of 15% during the Track
Record Period. These subsidiaries were also entitled to an additional tax deductible allowance
amounting to 75% or 100% of the qualified research and development costs incurred for each of the
years during the Track Record Period.
8 DIRECTORS’ AND SUPERVISORS’ EMOLUMENTS
Details of the emoluments of the directors and supervisors of the Company during the years ended 31
December 2022, 2023 and 2024 and the six months ended 30 June 2024 (unaudited) and 2025 are as followings:
Y ear ended 31 December 2022
Salaries,
allowances
and benefits
in kind
Discretionary
bonuses
Retirement
scheme
contributions
Directors’
and
supervisors’
fees Sub-total
Share-based
payments Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note (i))
Directors
Mr. Zhu Yiming /H1118/H1118/H1118/H1118/H1118/H11182,937 4,100 63 – 7,100 – 7,100
Mr. Zhang Shuai /H1118/H1118/H1118/H1118/H1118– – –––––
Mr. Wang Zhiwei /H1118/H1118/H1118/H1118/H1118– – –––––
Mr. He Wei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,119 902 58 – 2,079 3,482 5,561
Ms. Li Hong (appointed
on 16 December
2022) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111877 93 3 – 173 225 398
Mr. Hu Hong (appointed
on 16 December
2022) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855 134 3 – 192 182 374
Mr. Shu Qingming
(resigned on
26 October 2022) /H1118/H1118/H1118/H11184,156 3,398 35 – 7,589 – 7,589
Mr. Cheng Taiyi
(resigned on
26 October 2022) /H1118/H1118/H1118/H11185,149 2,565 35 – 7,749 – 7,749
APPENDIX I ACCOUNTANTS’ REPORT
– I-40 –


--- page 441 ---
Y ear ended 31 December 2022
Salaries,
allowances
and benefits
in kind
Discretionary
bonuses
Retirement
scheme
contributions
Directors’
and
supervisors’
fees Sub-total
Share-based
payments Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note (i))
Independent directors
Mr. Zhang Kedong /H1118/H1118/H1118/H1118– – – 150 150 – 150
Mr. Liang Shangshang /H1118/H1118 – – – 150 150 – 150
Mr. Qian He /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 150 150 – 150
Supervisors (Note ii)
Ms. Wen Tian /H1118/H1118/H1118/H1118/H1118/H1118/H1118158 57 20 – 235 – 235
Mr. Ge Liang /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – –––––
Ms. Hu Jing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – –––––
13,651 11,249 217 450 25,567 3,889 29,456
Y ear ended 31 December 2023
Salaries,
allowances
and benefits
in kind
Discretionary
bonuses
Retirement
scheme
contributions
Directors’
and
supervisors’
fees Sub-total
Share-based
payments Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note (i))
Directors
Mr. Zhu Yiming /H1118/H1118/H1118/H1118/H1118/H11182,886 – 68 – 2,954 – 2,954
Mr. He Wei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,111 – 63 – 1,174 1,881 3,055
Mr. Wang Zhiwei /H1118/H1118/H1118/H1118/H1118– – –––––
Mr. Hu Hong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,026 – 63 – 3,089 2,239 5,328
Ms. Li Hong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,936 – 68 – 2,004 2,777 4,781
Mr. Zhang Shuai
(resigned on 26 June
2023) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – –––––
Independent directors
Mr. Zhang Kedong /H1118/H1118/H1118/H1118– – – 150 150 – 150
Mr. Liang Shangshang /H1118/H1118 – – – 150 150 – 150
Mr. Qian He /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 150 150 – 150
Mr. Zheng Xiaodong
(appointed on
12 September 2023) /H1118/H1118 – – –4 64 6 –4 6
Supervisors (Note ii)
Ms. Wen Tian /H1118/H1118/H1118/H1118/H1118/H1118/H1118177 23 29 – 229 – 229
Mr. Ge Liang /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – –––––
Ms. Hu Jing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – –––––
9,136 23 291 496 9,946 6,897 16,843
APPENDIX I ACCOUNTANTS’ REPORT
– I-41 –


--- page 442 ---
Y ear ended 31 December 2024
Salaries,
allowances
and benefits
in kind
Discretionary
bonuses
Retirement
scheme
contributions
Directors’
and
supervisors’
fees Sub-total
Share-based
payments Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note (i))
Directors
Mr. Zhu Yiming /H1118/H1118/H1118/H1118/H1118/H11182,873 1,855 71 – 4,799 – 4,799
Mr. He Wei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,059 420 65 – 1,544 1,730 3,274
Mr. Wang Zhiwei – – –––––
Mr. Hu Hong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,889 3,323 66 – 6,278 11,137 17,415
Ms. Li Hong
(resigned on
16 December 2024) /H1118/H11181,860 1,547 68 – 3,475 4,742 8,217
Independent directors
Mr. Zhou Haitao
(appointed on
16 December 2024) /H1118/H1118 – – –1 11 1 –1 1
Mr. Qian He /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 154 154 – 154
Ms. Y ang Xiaowen
(appointed on
16 December 2024) /H1118/H1118 – – –1 11 1 –1 1
Ms. Chen Jie (appointed
on 16 December
2024) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – –1 11 1 –1 1
Mr. Zheng Xiaodong /H1118/H1118/H1118 – – – 154 154 – 154
Mr. Zhang Kedong
(resigned on
16 December 2024) /H1118/H1118 – – – 144 144 – 144
Mr. Liang Shangshang
(resigned on
16 December 2024) /H1118/H1118 – – – 144 144 – 144
Supervisors (Note ii)
Ms. Wen Tian /H1118/H1118/H1118/H1118/H1118/H1118/H1118115 44 35 – 194 – 194
Mr. Ge Liang /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – –––––
Ms. Liu Xiaowei
(appointed on
16 December 2024)) /H1118/H1118 – – –––––
Ms. Hu Jing
(resigned on
16 December 2024) /H1118/H1118 – – –––––
8,796 7,189 305 629 16,919 17,609 34,528
Six months ended 30 June 2025
Salaries,
allowances
and benefits
in kind
Discretionary
bonuses
Retirement
scheme
contributions
Directors’
and
supervisors’
fees Sub-total
Share-based
payments Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note (i))
Directors
Mr. Zhu Yiming /H1118/H1118/H1118/H1118/H1118/H11181,497 – 35 – 1,532 – 1,532
Mr. He Wei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118564 – 26 – 590 724 1,314
Mr. Wang Zhiwei
(resigned on 10 June
2025) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – –––––
Mr. Hu Hong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,507 – 34 – 1,541 8,178 9,719
Ms. Wen Tian (appointed
on 10 June 2025) /H1118/H1118/H1118/H1118124 – 19 – 143 – 143
APPENDIX I ACCOUNTANTS’ REPORT
– I-42 –


--- page 443 ---
Six months ended 30 June 2025
Salaries,
allowances
and benefits
in kind
Discretionary
bonuses
Retirement
scheme
contributions
Directors’
and
supervisors’
fees Sub-total
Share-based
payments Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note (i))
Independent directors
Mr. Zhou Haitao /H1118/H1118/H1118/H1118/H1118/H1118– – – 120 120 – 120
Mr. Qian He /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 120 120 – 120
Ms. Y ang Xiaowen /H1118/H1118/H1118/H1118– – – 120 120 – 120
Ms. Chen Jie /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 120 120 – 120
Mr. Zheng Xiaodong /H1118/H1118/H1118 – – – 120 120 – 120
Supervisors (Note ii)
Ms. Wen Tian (Note iii) /H1118 – – –––––
Mr. Ge Liang /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – –––––
Ms. Liu Xiaowei /H1118/H1118/H1118/H1118/H1118– – –––––
3,692 – 114 600 4,406 8,902 13,308
Six months ended 30 June 2024 (unaudited)
Salaries,
allowances
and benefits
in kind
Discretionary
bonuses
Retirement
scheme
contributions
Directors’
and
supervisors’
fees Sub-total
Share-based
payments Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note (i))
Directors
Mr. Zhu Yiming /H1118/H1118/H1118/H1118/H1118/H11181,437 – 35 – 1,472 – 1,472
Mr. He Wei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118555 – 33 – 588 663 1,251
Mr. Wang Zhiwei /H1118/H1118/H1118/H1118/H1118– – –––––
Mr. Hu Hong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,446 – 33 – 1,479 1,750 3,229
Ms. Li Hong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118971 – 35 – 1,006 1,454 2,460
Independent directors
Mr. Qian He /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – –7 57 5 –7 5
Mr. Zheng Xiaodong /H1118/H1118/H1118 – – –7 57 5 –7 5
Mr. Zhang Kedong /H1118/H1118/H1118/H1118– – –7 57 5 –7 5
Mr. Liang Shangshang /H1118/H1118 – – –7 57 5 –7 5
Supervisors (Note ii)
Ms. Wen Tian /H1118/H1118/H1118/H1118/H1118/H1118/H111831 – 17 – 48 – 48
Mr. Ge Liang /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – –––––
Ms. Hu Jing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – –––––
4,440 – 153 300 4,893 3,867 8,760
Notes:
(i) These represent the estimated value of share options and restricted shares granted to the directors under the
Company’s share-based plans. The values of these share options and restricted shares are measured according
to the Group’s accounting policies for share-based payment transactions as set out in Note 2(q)(ii) and, in
accordance with that policy, includes adjustments to reverse amounts accrued in previous years where grants
of equity instruments are forfeited prior to vesting.
The details of these benefits in kind, including the principal terms and number of share options and restricted
shares granted, are disclosed in Note 30.
(ii) The extraordinary general meeting of the Company approved of the cancellation of the board of supervisors
on 10 June 2025 and there are no supervisors of the Company thereon.
(iii) Ms. Wen Tian resigned as a supervisor and was appointed as a director on 10 June 2025. Her emoluments,
being a supervisor or a director, for the six months ended 30 June 2025 were presented in the line item under
“Directors”.
APPENDIX I ACCOUNTANTS’ REPORT
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9 INDIVIDUALS WITH HIGHEST EMOLUMENTS
The number of directors and non-directors included as the five highest paid individuals of the Group for the
years ended 31 December 2022, 2023 and 2024 and the six months ended 30 June 2024 (unaudited) and 2025 are set
forth below:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
Number of
individuals
Number of
individuals
Number of
individuals
Number of
individuals
(unaudited)
Number of
individuals
Directors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852342
Non-directors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–3213
55555
The emoluments of directors are disclosed in Note 8. The aggregate of the emoluments in respect of the
remaining highest paid individuals are as follows:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
RMB’000
Salaries and other
emoluments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,477 3,308 1,083 3,283
Discretionary bonuses /H1118/H1118/H1118 – – 2,458 – –
Retirement scheme
contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 189 132 33 94
Share-based payments /H1118/H1118/H1118 – 5,150 7,268 1,083 7,800
– 9,816 13,166 2,199 11,177
The emoluments of the individuals who are not directors and who are amongst the five highest paid individuals
of the Group are within the following bands:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
Number of
individuals
Number of
individuals
Number of
individuals
Number of
individuals
(unaudited)
Number of
individuals
HK$2,000,001 –
HK$2,500,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––1–
HK$3,000,001 –
HK$3,500,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118–1–––
HK$3,500,001 –
HK$4,000,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118–2––2
HK$4,500,001 –
HK$5,000,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118––––1
HK$6,000,001 –
HK$6,500,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118––1––
HK$8,000,001 –
HK$8,500,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118––1––
APPENDIX I ACCOUNTANTS’ REPORT
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10 OTHER COMPREHENSIVE INCOME
Tax effects relating to each component of other comprehensive income
Y ear ended 31 December 2022
Before-tax amount Tax benefit Net-of-tax amount
RMB’000 RMB’000 RMB’000
Equity securities designated at FVOCI – net movement
in fair value reserve (non-recycling) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(47,450) 6,515 (40,935)
Exchange differences on translation of financial
statements into presentation currency /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111882,080 – 82,080
Share of other comprehensive income of associates /H1118/H1118/H1118 127 – 127
Other comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,757 6,515 41,272
Y ear ended 31 December 2023
Before-tax amount Tax expense Net-of-tax amount
RMB’000 RMB’000 RMB’000
Equity securities designated at FVOCI – net movement
in fair value reserve (non-recycling) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118216,514 (53,686) 162,828
Exchange differences on translation of financial
statements into presentation currency /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,823 – 17,823
Share of other comprehensive income of associates /H1118/H1118/H1118 (2) – (2)
Other comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118234,335 (53,686) 180,649
Y ear ended 31 December 2024
Before-tax amount Tax expense Net-of-tax amount
RMB’000 RMB’000 RMB’000
Equity securities designated at FVOCI – net movement
in fair value reserve (non-recycling) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118209,110 (15,640) 193,470
Exchange differences on translation of financial
statements into presentation currency /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,887 – 17,887
Share of other comprehensive income of associates /H1118/H1118/H1118 2–2
Other comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118226,999 (15,640) 211,359
Six months ended 30 June 2025
Before-tax amount Tax expense Net-of-tax amount
RMB’000 RMB’000 RMB’000
Equity securities designated at FVOCI – net movement
in fair value reserve (non-recycling) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118170,837 (25,922) 144,915
Exchange differences on translation of financial
statements into presentation currency /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,872) – (4,872)
Other comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118165,965 (25,922) 140,043
Six months ended 30 June 2024 (unaudited)
Before-tax amount Tax benefit Net-of-tax amount
RMB’000 RMB’000 RMB’000
Equity securities designated at FVOCI – net movement
in fair value reserve (non-recycling) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(138,709) 33,321 (105,388)
Exchange differences on translation of financial
statements into presentation currency /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,337 – 6,337
Share of other comprehensive income of associates /H1118/H1118/H1118 1–1
Other comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(132,371) 33,321 (99,050)
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 446 ---
11 EARNINGS PER SHARE
(a) Basic earnings per share
The calculation of basic earnings per share is based on the profit attributable to ordinary equity shareholders
of the Company, after adjusting for the effect of dividends entitled to holders of restricted shares issued by the
Company (Note 30(b)), and the weighted average number of the Company’s ordinary shares in issue during the
respective years/periods, calculated as follows:
(i) Profit attributable to ordinary equity shareholders of the Company
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Profit attributable to all
equity shareholders of
the Company /H1118/H1118/H1118/H1118/H1118/H1118/H11182,052,882 161,141 1,102,543 517,000 575,476
Less: dividends that
holders of restricted
shares are entitled to
receive (Note 30(b)) /H1118/H1118/H1118(1,802) – (364) – –
Profit attributable to
ordinary equity
shareholders of the
Company used in
calculating basic
earnings per share /H1118/H1118/H1118/H11182,051,080 161,141 1,102,179 517,000 575,476
(ii) Weighted average number of ordinary shares
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
’000 ’000 ’000 ‘000
(unaudited)
‘000
Issued ordinary shares at
the beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118667,467 667,025 666,906 666,906 664,124
Less: treasury shares at the
beginning of the
year/period (Note
31(d)(ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,538) (3,745) (3,510) (3,510) (3,041)
Ordinary shares
outstanding at the
beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118661,929 663,280 663,396 663,396 661,083
Effect of shares
repurchased (Note
31(d)(ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (171) (1,236) (605) –
Effect of share options
exercised (Note
31(d)(ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 2 1 7
Effect of restricted shares
vested (Note 31(d)(ii)) /H1118/H1118 710 574 559 303 243
Weighted average number
of ordinary shares at the
end of the year/period /H1118/H1118 662,639 663,683 662,719 663,094 661,543
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 447 ---
(b) Diluted earnings per share
The calculation of diluted earnings per share is based on the profit attributable to ordinary equity shareholders
of the Company, and the weighted average number of the Company’s ordinary shares (diluted), calculated as follows:
Weighted average number of ordinary shares (diluted)
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
’000 ’000 ’000 ’000
(unaudited)
’000
Weighted average number
of ordinary shares at the
end of the year/period /H1118/H1118 662,639 663,683 662,719 663,094 661,543
Effect of deemed issue of
shares under the
Company’s restricted
shares plan (Note 30(b)) /H1118 1,889 1,405 1,326 513 800
Effect of deemed issue of
shares under the
Company’s share option
plans (Note 30(a)) /H1118/H1118/H1118/H1118 – – 206 – 1,244
Weighted average number
of ordinary shares
(diluted) at the end of
the year/period /H1118/H1118/H1118/H1118/H1118/H1118664,528 665,088 664,251 663,607 663,587
12 PROPERTY, PLANT AND EQUIPMENT
(a) The Group
Buildings
Machinery
and equipment Motor vehicles
Leasehold
improvements Others Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2022 /H1118/H1118/H1118/H1118395,110 744,254 1,500 47,551 94,613 1,283,028
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,046 342,672 348 3,032 39,475 395,573
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (17,180) – – (4,924) (22,104)
Exchange adjustments /H1118/H1118 4,412 4,301 – – 108 8,821
At 31 December 2022 /H1118/H1118409,568 1,074,047 1,848 50,583 129,272 1,665,318------ ------- ---- ----- ------ -------
Accumulated
depreciation:
At 1 January 2022 /H1118/H1118/H1118/H111828,647 346,842 963 8,931 42,857 428,240
Charge for the year /H1118/H1118/H111811,369 170,508 260 12,462 24,847 219,446
Written back on
disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (15,455) – – (4,658) (20,113)
Exchange adjustments /H1118/H1118 257 3,361 – – 90 3,708
At 31 December 2022 /H1118/H1118 40,273 505,256 1,223 21,393 63,136 631,281------ ------- ---- ----- ------ -------
Carrying amount:
At 31 December 2022 /H1118/H1118369,295 568,791 625 29,190 66,136 1,034,037
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 448 ---
Buildings
Machinery
and equipment Motor vehicles
Leasehold
improvements Others Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2023 /H1118/H1118/H1118/H1118409,568 1,074,047 1,848 50,583 129,272 1,665,318
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118159,376 168,726 156 22,337 24,434 375,029
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (7,564) – (4,364) (4,515) (16,443)
Exchange adjustments /H1118/H1118 885 795 – – 11 1,691
At 31 December 2023 /H1118/H1118569,829 1,236,004 2,004 68,556 149,202 2,025,595------ ------- ---- ----- ------ -------
Accumulated
depreciation:
At 1 January 2023 /H1118/H1118/H1118/H111840,273 505,256 1,223 21,393 63,136 631,281
Charge for the year /H1118/H1118/H111813,837 218,380 210 11,989 32,369 276,785
Written back on
disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (6,816) – (4,364) (4,243) (15,423)
Exchange adjustments /H1118/H1118 83 967 – – 12 1,062
At 31 December 2023 /H1118/H1118 54,193 717,787 1,433 29,018 91,274 893,705------ ------- ---- ----- ------ -------
Carrying amount:
At 31 December 2023 /H1118/H1118515,636 518,217 571 39,538 57,928 1,131,890
Cost:
At 1 January 2024 /H1118/H1118/H1118/H1118569,829 1,236,004 2,004 68,556 149,202 2,025,595
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,545 200,831 2,674 4,095 17,017 226,162
Additions through
acquisition of a
subsidiary (Note 33) /H1118 – 11,504 256 446 7,156 19,362
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (2,147) (420) – (1,623) (4,190)
Exchange adjustments /H1118/H1118 792 960 25 – 5 1,782
At 31 December 2024 /H1118/H1118572,166 1,447,152 4,539 73,097 171,757 2,268,711------ ------- ---- ----- ------ -------
Accumulated
depreciation:
At 1 January 2024 /H1118/H1118/H1118/H111854,193 717,787 1,433 29,018 91,274 893,705
Charge for the year /H1118/H1118/H111815,449 225,141 495 13,313 29,417 283,815
Additions through
acquisition of a
subsidiary (Note 33) /H1118 – 227 – – 3,397 3,624
Written back on
disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (1,407) (399) – (906) (2,712)
Exchange adjustments /H1118/H1118 6 5 7 1 72–6 7 9 0
At 31 December 2024 /H1118/H1118 69,707 942,465 1,531 42,331 123,188 1,179,222------
------- ---- ----- ------ -------
Carrying amount:
At 31 December 2024 /H1118/H1118502,459 504,687 3,008 30,766 48,569 1,089,489
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 449 ---
Buildings
Machinery
and equipment Motor vehicles
Leasehold
improvements Others Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2025 /H1118/H1118/H1118/H1118572,166 1,447,152 4,539 73,097 171,757 2,268,711
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,635 219,882 – 17,165 9,388 248,070
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (24,401) – (82) (1,922) (26,405)
Exchange adjustments /H1118/H1118 (232) (244) (9) (40) 14 (511)
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118573,569 1,642,389 4,530 90,140 179,237 2,489,865------ ------- ---- ----- ------ -------
Accumulated
depreciation and
impairment losses:
At 1 January 2025 /H1118/H1118/H1118/H111869,707 942,465 1,531 42,331 123,188 1,179,222
Charge for the period /H1118/H1118 7,963 101,951 415 9,889 13,299 133,517
Capitalised to
development
expenditure /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 23,185 – 77 – 23,262
Impairment loss
(Note (i)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,81 0––– 3,810
Written back on
disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (21,446) – (82) (1,796) (23,324)
Exchange adjustments /H1118/H1118 (20) (178) (2) – 4 (196)
At 30 June 2025 /H1118/H1118/H1118/H1118/H111877,650 1,049,787 1,944 52,215 134,695 1,316,291------
------- ---- ----- ------ -------
Carrying amount:
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118495,919 592,602 2,586 37,925 44,542 1,173,574
Note (i):
During the six months ended 30 June 2025, given the drop in market demand, the Group has identified products
that had under-performed against expectation, and has carried out impairment testing on the related property,
plant and equipment and intangible assets, and written down such assets to their recoverable amounts, and the
related impairment losses were recognised in profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
– I-49 –


--- page 450 ---
(b) The Company
Buildings
Machinery
and equipment Motor vehicles
Leasehold
improvements Others Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2022 /H1118/H1118/H1118/H1118216,376 594,107 847 18,954 44,159 874,443
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 192,706 – 1,882 26,394 220,982
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (18,051) – – (2,873) (20,924)
At 31 December 2022 /H1118/H1118216,376 768,762 847 20,836 67,680 1,074,501------ ------- ---- ------ ----- -------
Accumulated
depreciation:
At 1 January 2022 /H1118/H1118/H1118/H111814,843 271,507 754 1,549 25,485 314,138
Charge for the year /H1118/H1118/H11185,901 124,851 51 4,600 10,141 145,544
Written back on
disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (12,396) – – (2,728) (15,124)
At 31 December 2022 /H1118/H1118 20,744 383,962 805 6,149 32,898 444,558------ ------- ---- ------ ----- -------
Carrying amount:
At 31 December 2022 /H1118/H1118195,632 384,800 42 14,687 34,782 629,943
Cost:
At 1 January 2023 /H1118/H1118/H1118/H1118216,376 768,762 847 20,836 67,680 1,074,501
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 134,651 – – 12,668 147,319
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (7,480) – – (1,953) (9,433)
At 31 December 2023 /H1118/H1118216,376 895,933 847 20,836 78,395 1,212,387------ ------- ---- ------ ----- -------
Accumulated
depreciation:
At 1 January 2023 /H1118/H1118/H1118/H111820,744 383,962 805 6,149 32,898 444,558
Charge for the year /H1118/H1118/H11185,901 155,120 – 4,709 16,490 182,220
Written back on
disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (6,736) – – (1,853) (8,589)
At 31 December 2023 /H1118/H1118 26,645 532,346 805 10,858 47,535 618,189------ ------- ---- ------ ----- -------
Carrying amount:
At 31 December 2023 /H1118/H1118189,731 363,587 42 9,978 30,860 594,198
Cost:
At 1 January 2024 /H1118/H1118/H1118/H1118216,376 895,933 847 20,836 78,395 1,212,387
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 148,357 464 2,686 10,347 161,854
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (123,275) (420) – (7,981) (131,676)
At 31 December 2024 /H1118/H1118216,376 921,015 891 23,522 80,761 1,242,565------ ------- ---- ------ ----- -------
Accumulated
depreciation:
At 1 January 2024 /H1118/H1118/H1118/H111826,645 532,346 805 10,858 47,535 618,189
Charge for the year /H1118/H1118/H11185,901 158,156 29 4,162 15,583 183,831
Written back on
disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (65,192) (399) – (2,786) (68,377)
At 31 December 2024 /H1118/H1118 32,546 625,310 435 15,020 60,332 733,643------ ------- ---- ------ ----- -------
Carrying amount:
At 31 December 2024 /H1118/H1118183,830 295,705 456 8,502 20,429 508,922
APPENDIX I ACCOUNTANTS’ REPORT
– I-50 –


--- page 451 ---
Buildings
Machinery
and equipment Motor vehicles
Leasehold
improvements Others Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2025 /H1118/H1118/H1118/H1118216,376 921,015 891 23,522 80,761 1,242,565
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 176,219 – 99 2,936 179,254
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (95,726) – (2,811) (646) (99,183)
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118216,376 1,001,508 891 20,810 83,051 1,322,636------ ------- ---- ------ ----- -------
Accumulated
depreciation and
impairment losses:
At 1 January 2025 /H1118/H1118/H1118/H111832,546 625,310 435 15,020 60,332 733,643
Charge for the period /H1118/H1118 2,950 66,280 44 2,325 6,667 78,266
Capitalised to
development
expenditure /H1118/H1118/H1118/H1118/H1118/H1118– 9,19 8––– 9,198
Impairment loss /H1118/H1118/H1118/H1118/H1118/H1118– 3,79 2––– 3,792
Written back on
disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (1,861) – (2,810) (613) (5,284)
At 30 June 2025 /H1118/H1118/H1118/H1118/H111835,496 702,719 479 14,535 66,386 819,615------
------- ---- ------ ----- -------
Carrying amount:
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118180,880 298,789 412 6,275 16,665 503,021
APPENDIX I ACCOUNTANTS’ REPORT
– I-51 –


--- page 452 ---
13 RIGHT-OF-USE ASSETS
The reconciliations of the carrying amounts of right-of-use assets by class of underlying assets are as follows:
(a) The Group
Leased properties Land use rights Others Total
RMB’000 RMB’000 RMB’000 RMB’000
(Note (i)) (Note (ii))
Cost:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118151,036 5,224 9,717 165,977
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,870 – 4,217 20,087
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(8,026) – – (8,026)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118116 – – 116
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118158,996 5,224 13,934 178,154------ ---- ----- ------
Accumulated depreciation:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,133 557 1,889 25,579
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,060 104 3,879 37,043
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,124) – – (6,124)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 3–– 5 3
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,122 661 5,768 56,551------ ---- ----- ------
Carrying amount:
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118108,874 4,563 8,166 121,603
Cost:
At 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118158,996 5,224 13,934 178,154
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,862 – 2,168 35,030
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,335) – – (11,335)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7) – – (7)
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118180,516 5,224 16,102 201,842------ ---- ----- ------
Accumulated depreciation:
At 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,122 661 5,768 56,551
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,750 104 5,645 42,499
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118(8,578) – – (8,578)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) – – (5)
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878,289 765 11,413 90,467------ ---- ----- ------
Carrying amount:
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118102,227 4,459 4,689 111,375
APPENDIX I ACCOUNTANTS’ REPORT
– I-52 –


--- page 453 ---
Leased properties Land use rights Others Total
RMB’000 RMB’000 RMB’000 RMB’000
(Note (i)) (Note (ii))
Cost:
At 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118180,516 5,224 16,102 201,842
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,116 – 11,129 24,245
Additions through acquisition of a
subsidiary (Note 33) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,180 – – 12,180
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(255) – – (255)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 3–– 5 3
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118205,610 5,224 27,231 238,065------ ---- ----- ------
Accumulated depreciation:
At 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878,289 765 11,413 90,467
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,232 104 6,066 44,402
Additions through acquisition of a
subsidiary (Note 33) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,451 – – 5,451
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118(255) – – (255)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 6–– 1 6
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118121,733 869 17,479 140,081------ ---- ----- ------
Carrying amount:
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111883,877 4,355 9,752 97,984
Cost:
At 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118205,610 5,224 27,231 238,065
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,469 – – 44,469
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,345) – – (11,345)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(72) – – (72)
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118238,662 5,224 27,231 271,117------ ---- ----- ------
Accumulated depreciation:
At 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118121,733 869 17,479 140,081
Charge for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,252 52 2,641 27,945
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,085) – – (7,085)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(24) – – (24)
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118139,876 921 20,120 160,917------ ---- ----- ------
Carrying amount:
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111898,786 4,303 7,111 110,200
The analyses of expense items in relation to leases recognised in profit or loss are as follows:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Depreciation charges of
right-of-use assets /H1118/H1118/H1118/H111837,043 42,499 44,402 22,082 27,945
Interest on lease liabilities
(Note 6(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,973 6,659 5,558 2,941 2,721
Expenses relating to short-
term leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,171 3,025 3,151 1,512 1,380
Details of total cash outflow for leases and the maturity analyses of lease liabilities are set out in Notes 23(c)
and 28, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-53 –


--- page 454 ---
(i) Leased properties
The Group has obtained the right to use properties as office premises through tenancy agreements. The leases
typically run for an initial period of 2 to 6 years.
(ii) Land use rights
Land in respect of land use rights are all located in Chinese Mainland with a lease period of 50 years. Lump
sum payments were made upfront to acquire these property interests from the relevant government authorities.
(b) The Company
Leased properties Others Total
RMB’000 RMB’000 RMB’000
(Note 13(a)(i))
Cost:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111882,633 9,717 92,350
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,217 4,217
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111882,633 13,934 96,567----- ----- -- ----
Accumulated depreciation:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,073 1,889 10,962
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,019 3,879 19,898
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,092 5,768 30,860----- ----- ------
Carrying amount:
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,541 8,166 65,707
Cost:
At 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111882,633 13,934 96,567
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,168 2,168
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111882,633 16,102 98,735----- ----- -- ----
Accumulated depreciation:
At 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,092 5,768 30,860
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,019 5,645 21,664
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,111 11,413 52,524----- ----- ------
Carrying amount:
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,522 4,689 46,211
Cost:
At 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111882,633 16,102 98,735
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,304 11,129 14,433
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111885,937 27,231 113,168----- ----- -- ----
Accumulated depreciation:
At 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,111 11,413 52,524
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,461 6,066 22,527
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,572 17,479 75,051----- ----- ------
Carrying amount:
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,365 9,752 38,117
APPENDIX I ACCOUNTANTS’ REPORT
– I-54 –


--- page 455 ---
Leased properties Others Total
RMB’000 RMB’000 RMB’000
(Note 13(a)(i))
Cost:
At 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111885,937 27,231 113,168
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111885,937 27,231 113,168----- ----- -- ----
Accumulated depreciation:
At 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,572 17,479 75,051
Charge for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,235 2,641 10,876
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,807 20,120 85,927----- ----- ------
Carrying amount:
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,130 7,111 27,241
APPENDIX I ACCOUNTANTS’ REPORT
– I-55 –


--- page 456 ---
14 INTANGIBLE ASSETS
(a) The Group
Development
expenditure
Patents and
proprietary
technologies
Software and
others Total
RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118129,970 387,589 121,113 638,672
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893,865 – 40,855 134,720
Transfer (out)/in /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(112,520) 112,520 – –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (22,387) (22,387)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–9 3 –9 3
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118111,315 500,202 139,581 751,098------- ------ ------ ------
Accumulated amortisation and
impairment losses:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 156,234 41,129 197,363
Amortisation for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 74,618 40,646 115,264
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (22,387) (22,387)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–1 8 –1 8
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 230,870 59,388 290,258------- ------ ------ ------
Carrying amount:
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118111,315 269,332 80,193 460,840
Cost:
At 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118111,315 500,202 139,581 751,098
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111877,124 637 29,394 107,155
Transfer (out)/in /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(25,978) 25,978 – –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (36,078) (36,078)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–1 9 –1 9
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118162,461 526,836 132,897 822,194------- ------ ------ ------
Accumulated amortisation and
impairment losses:
At 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 230,870 59,388 290,258
Amortisation for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 87,520 36,877 124,397
Impairment loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,630 – – 2,630
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (36,078) (36,078)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–5 0 –5 0
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,630 318,440 60,187 381,257------- ------ ------ ------
Carrying amount: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118159,831 208,396 72,710 440,937
APPENDIX I ACCOUNTANTS’ REPORT
– I-56 –


--- page 457 ---
Development
expenditure
Patents and
proprietary
technologies
Software and
others Total
RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118162,461 526,836 132,897 822,194
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118133,727 – 124,960 258,687
Additions through acquisition of a
subsidiary (Note 33) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 39,252 8,255 47,507
Transfer (out)/in /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(75,246) 75,246 – –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,630) (283) (26,326) (29,239)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–1 7 –1 7
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118218,312 641,068 239,786 1,099,166------- ------ ------ -------
Accumulated amortisation and
impairment losses:
At 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,630 318,440 60,187 381,257
Amortisation for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 94,294 44,828 139,122
Additions through acquisition of a
subsidiary (Note 33) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 3,795 3,795
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,630) (283) (26,326) (29,239)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–1 6 –1 6
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 412,467 82,484 494,951------- ------ ------ -------
Carrying amount:
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118218,312 228,601 157,302 604,215
Cost:
At 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118218,312 641,068 239,786 1,099,166
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111891,824 – 19,697 111,521
Capitalised to development
expenditure /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,741 – – 26,741
Transfer (out)/in /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(131,387) 131,387 – –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (9,303) (9,303)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (5) – (5)
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118205,490 772,450 250,180 1,228,120------- ------ ------ -------
Accumulated amortisation and
impairment losses:
At 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 412,467 82,484 494,951
Amortisation for the period /H1118/H1118/H1118/H1118/H1118/H1118– 49,198 33,299 82,497
Capitalised to development
expenditure /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 3,479 3,479
Impairment loss (Note 12(a)(i)) /H1118/H1118/H1118 – 1,903 – 1,903
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (9,303) (9,303)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (5) – (5)
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 463,563 109,959 573,522------- ------ ------ -------
Carrying amount:
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118205,490 308,887 140,221 654,598
APPENDIX I ACCOUNTANTS’ REPORT
– I-57 –


--- page 458 ---
The Group identifies the development of each potential product under individual project. Generally, it takes
the Group one to three years to convert capitalised development expenditure under each individual projects into
patents and proprietary technologies, which is taking at the point of time when the Group is able to mass produce
the products using these patents and proprietary technologies to meet market demands. The Group categorises the
above projects into various product types and performs impairment tests on each category comprising these
capitalised development expenditures annually. For the purpose of impairment testing, capitalised development
expenditure is allocated to CGUs comprising the assets and liabilities that are expected to generate cash flows with
such development expenditures. The recoverable amounts of the CGUs comprising capitalised development
expenditures are determined based on value-in-use calculations. The Group engaged an independent professional
valuer to assist with the calculations. These calculations use cash flow projections based on financial budgets
approved by the management covering a period of six to eight years, in light of the expected overall life cycle of these
projects. The key assumptions used in estimating the recoverable amounts are as follows:
As at 31 December
2022 2023 2024
Gross profit margin (Note (i)) /H1118/H1118/H1118/H1118/H1118/H111813%-48% 12%-49% 10%-44%
Pre-tax discount rate (Note (ii)) /H1118/H1118/H1118/H1118/H111814.86%-15.13% 14.65%-15.29% 16.07%
(i) The gross profit margin is based on current operational status and future business plan of the CGUs, and
the Group’s historical experience and forecast of the semiconductor markets.
(ii) The pre-tax discount rate reflects specific risks relating to the respective CGUs comprising development
expenditures.
The Group performs annual impairment tests on development expenditure at the end of the reporting year. In
carrying out the impairment testing, the management of the Group also considers the commercial feasibility of the
potential products that will be produced under each project and its related market demand. Based on the impairment
testing carried out by the management of the Group during the Track Record Period, it had been determined that the
previous capitalised development expenditure of RMB2,630,000 was considered to be no longer commercially
feasible and has been fully impaired as at 31 December 2023, and accordingly, the related impairment loss was
recognised in profit or loss for the year ended 31 December 2023. Apart from the above impaired development
expenditure, the amounts of headroom for CGUs comprising the remaining capitalised development expenditure
amounted to RMB696,178,000, RMB1,313,047,000 and RMB1,040,597,000 as at 31 December 2022, 2023 and 2024,
respectively. As at 30 June 2025, the management of the Group considered there is no indication of impairment as
to CGUs comprising development expenditure, and as a result no impairment test was considered necessary.
The management of the Group have undertaken sensitivity analyses on the impairment test of CGUs
comprising development expenditure and identified a reasonably possible change in key parameters would not cause
the carrying amount of the CGUs to exceed its recoverable amount. The following tables set out the hypothetical
change to gross profit margin that would have removed the remaining headroom:
As at 31 December
2022 2023 2024
Gross profit margin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118-76% to -15% -78% to -13% -58% to -7%
The management of the Group believes that a reasonably possible change in the above key parameters would
not cause the carrying amount of the CGUs to exceed its recoverable amount.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 459 ---
(b) The Company
Development
expenditure
Patents and
proprietary
technologies
Software and
others Total
RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118133,399 125,836 91,633 350,868
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118158,166 – 33,202 191,368
Transfer (out)/in /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(152,953) 152,953 – –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (21,939) (21,939)
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118138,612 278,789 102,896 520,297------- ------ ------ ------
Accumulated amortisation and
impairment losses:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 51,952 31,529 83,481
Amortisation for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 39,324 27,321 66,645
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (21,939) (21,939)
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 91,276 36,911 128,187------- ------ ------ ------
Carrying amount:
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118138,612 187,513 65,985 392,110
Cost:
At 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118138,612 278,789 102,896 520,297
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118113,855 637 24,816 139,308
Transfer (out)/in /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(25,978) 25,978 – –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (24,218) (24,218)
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118226,489 305,404 103,494 635,387------- ------ ------ ------
Accumulated amortisation and
impairment losses:
At 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 91,276 36,911 128,187
Amortisation for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 63,888 29,609 93,497
Impairment loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,630 – – 2,630
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (24,218) (24,218)
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,630 155,164 42,302 200,096------- ------ ------ ------
Carrying amount:
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118223,859 150,240 61,192 435,291
Cost:
At 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118226,489 305,404 103,494 635,387
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118111,590 – 110,519 222,109
Transfer (out)/in /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(101,928) 101,928 – –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(173,719) – (21,878) (195,597)
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862,432 407,332 192,135 661,899------- ------ ------ ------
APPENDIX I ACCOUNTANTS’ REPORT
– I-59 –


--- page 460 ---
Development
expenditure
Patents and
proprietary
technologies
Software and
others Total
RMB’000 RMB’000 RMB’000 RMB’000
Accumulated amortisation and
impairment losses:
At 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,630 155,164 42,302 200,096
Amortisation for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 73,018 36,495 109,513
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,630) – (21,878) (24,508)
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 228,182 56,919 285,101------- ------ ------ ------
Carrying amount:
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862,432 179,150 135,216 376,798
Cost:
At 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862,432 407,332 192,135 661,899
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,728 – 19,138 56,866
Capitalised to development
expenditure /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,472 – – 12,472
Transfer (out)/in /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(23,370) 23,370 – –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (8,477) (8,810)
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111889,262 430,702 202,796 722,760------- ------ ------ ------
Accumulated amortisation and
impairment losses:
At 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 228,182 56,919 285,101
Amortisation for the period /H1118/H1118/H1118/H1118/H1118/H1118– 43,014 27,086 70,100
Capitalised to development
expenditure /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 3,274 3,274
Impairment loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,903 – 1,903
Written back on disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (8,477) (8,477)
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 273,099 78,802 351,901------- ------ ------ ------
Carrying amount:
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111889,262 157,603 123,994 370,859
APPENDIX I ACCOUNTANTS’ REPORT
– I-60 –


--- page 461 ---
15 GOODWILL
SiLead CGU XySemi CGU Freethink CGU Total
RMB’000 RMB’000 RMB’000 RMB’000
(Note 15(a)) (Note 15(b))
Cost:
At January 1 2022 and at 31
December 2022 and 2023 /H1118/H1118/H1118/H1118/H1118/H11181,305,479 – 3,092 1,308,571
Additions through acquisition of a
subsidiary (Note 33) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 207,083 – 207,083
At 31 December 2024 and at
30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,305,479 207,083 3,092 1,515,654------- ------ ---- -------
Accumulated impairment losses:
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118283,606 – – 283,606
Impairment loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118241,491 – – 241,491
At 31 December 2022 and 1 January
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118525,097 – – 525,097
Impairment loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118373,372 – – 373,372
At 31 December 2023, 2024 and 30
June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118898,469 – – 898,469------- ------ ---- -------
Carrying amount:
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118780,382 – 3,092 783,474
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118407,010 – 3,092 410,102
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118407,010 207,083 3,092 617,185
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118407,010 207,083 3,092 617,185
Impairment tests for CGUs containing goodwill
The Group performs annual impairment tests on goodwill at the end of the reporting year. For the purpose of
impairment testing as at 31 December 2022, 2023 and 2024, goodwill arising from the acquisition of SiLead Inc. ( ɪ
ʮ̡) in 2019 was allocated to the SiLead CGU, goodwill arising from the acquisition of
Suzhou XySemi Electronic Technology Co., Ltd. (ʮ̡) in 2024 was allocated to the XySemi
CGU, and goodwill arising from the acquisition of Suzhou Freethink Information Technology Co., Ltd. (ܠ
ʮ̡) in 2019 was allocated to the Freethink CGU. As at 30 June 2025, the management of the Group
considered there is no indication of impairment as to CGUs containing goodwill, and as a result no impairment test
was considered necessary.
(a) SiLead CGU
The recoverable amount of the SiLead CGU is determined based on value-in-use calculations. The
Group engaged an independent professional valuer to assist with the calculation. These calculations use cash
flow projections based on financial budgets approved by management covering a five-year period. The key
assumptions used in estimating the recoverable amounts are as follows:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Annual revenue growth rates during the
five-year period (Note (i)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186%-36% 8%-31% 3%-16%
Net profit margin (Note (i)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184%-11% 1%-9% 2%-11%
Growth rate beyond the five-year period
(Note (ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180% 0% 0%
Pre-tax discount rate (Note (iii)) /H1118/H1118/H1118/H1118/H1118/H1118/H111811.64% 10.61% 10.65%
APPENDIX I ACCOUNTANTS’ REPORT
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(i) The annual revenue growth rates and net profit margin are based on current operational status and
future business plan of the CGU, and the Group’s historical experience and forecast of the
semiconductor markets.
(ii) The growth rate beyond the five-year period does not exceed the average growth rate of the
relevant industry.
(iii) The pre-tax discount rate reflects specific risks relating to the SiLead CGU.
The management of the Group considered that attributable to the delay in the commercial production of
certain customers’ products which resulted in the SiLead CGU not meeting the original expected business
results, and based on the above assessments, concluded that impairment losses of RMB241,491,000 and
RMB373,372,000 were required at 31 December 2022 and 2023, respectively, and such losses were recognised
in profit or loss for the years ended 31 December 2022 and 2023, respectively. As at 31 December 2024, the
amount of headroom for SiLead CGU was RMB14,060,000.
The management of the Group have undertaken sensitivity analysis on the impairment test of goodwill
and identified a reasonably possible change in key parameters that would cause the carrying amount of the
CGU to exceed its recoverable amount. The following table sets out the hypothetical change to pre-tax discount
rate that would have removed the remaining headroom:
As at 31 December 2024 SiLead CGU
Pre-tax discount rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118+2.0%
(b) XySemi CGU
The recoverable amount of the XySemi CGU is determined based on value-in-use calculations. The
Group engaged an independent professional valuer to assist with the calculation. These calculations use cash
flow projections based on financial budgets approved by management covering a five-year period. The key
assumptions used in estimating the recoverable amount are as follows:
As at
31 December 2024
RMB’000
Annual revenue growth rates during the five-year period (Note (i)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182%-24%
Net profit margin (Note (i)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827%-29%
Growth rate beyond the five-year period (Note (ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180%
Pre-tax discount rate (Note (iii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815.26%
(i) The annual revenue growth rates and net profit margin are based on current operational status and
future business plan of the CGU, and the Group’s historical experience and forecast of the
semiconductor markets.
(ii) The growth rate beyond the five-year period does not exceed the average growth rate of the
relevant industry.
(iii) The pre-tax discount rate reflects specific risks relating to the XySemi CGU.
As at 31 December 2024, the amount of headroom for XySemi CGU was RMB39,116,000.
Management have undertaken sensitivity analysis on the impairment test of goodwill and identified a
reasonably possible change in key parameters that would cause the carrying amount of the CGU to exceed its
recoverable amount. The following table sets out the hypothetical change to pre-tax discount rate that would
have removed the remaining headroom:
As at 31 December 2024 XySemi CGU
Pre-tax discount rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118+5.0%
APPENDIX I ACCOUNTANTS’ REPORT
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16 INVESTMENTS IN SUBSIDIARIES
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Investments in subsidiaries, at cost /H1118 3,570,654 3,815,081 5,135,121 5,185,495
Less: impairment losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (165,648) (165,648) (165,648)
3,570,654 3,649,433 4,969,473 5,019,847
Details of the Group’s subsidiaries are set out in Note 1.
XySemi, the subsidiary of the Group which accounts for the majority of the NCI, was acquired by the Group
in December 2024, and the financial information of XySemi on the acquisition date is set out in Note 33.
17 INTERESTS IN ASSOCIATES
The Group
The following list contains the particulars of the Group’s associates, all of which are unlisted corporate
entities:
Name of associates
Place of
establishment
Particulars of
registered and
paid-up capital
Percentage of ownership interest
attributable to the Group
Principal
activity
As at 31 December
As at
30 June
2022 2023 2024 2025
Hefei Stony Creek
GigaDevice
Chuangzhi V enture
Capital Fund
Partnership
(Limited
Partnership) (٭
௴౽௴ุ
ΥྫΆุ
(Υྫ)) (i)(ii) /H1118
Chinese
Mainland
Registered capital of
RMB1,100,000,000
and paid-up capital of
RMB770,000,000
– – 27.27% 27.27% Equity
investment
and asset
management
Hefei Reliance
Memory Limited
(ฆཥɿϞ
ʮ̡) (i) /H1118/H1118/H1118/H1118
Chinese
Mainland
RMB42,428,085 10.00% 12.50% 11.26% 10.08% Design,
technology
development
and sales of
integrated
circuit
products
Transcputing Tech
Co., Ltd ( ɪऎΈϻ
ʮ̡)
(i)(ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Chinese
Mainland
Registered capital
RMB21,524,522
and paid-up capital of
RMB16,024,522
– – 8.95% 12.06% Sales of chips
Deep Simplicity
Technology
Co., Ltd. ( ɪऎෳ
ࠢ
ʮ̡) (i) /H1118/H1118/H1118/H1118/H1118/H1118
Chinese
Mainland
RMB10,526,316 19.00% 19.00% 19.00% 19.00% Sales of chips
APPENDIX I ACCOUNTANTS’ REPORT
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(i) These entities’ official names are in Chinese. The English translations of these entities’ names are for
identification only.
(ii) Hefei Stony Creek GigaDevice Chuangzhi V enture Capital Fund Partnership (Limited Partnership) and
Transcputing Tech Co., Ltd are directly invested by the Company.
The Group concluded that the above entities are associates of the Group as the Group is able to exercise
significant influence over these entities via its capability to appoint directors in these entities to exert the Group’s
influence, but not control, over their operations.
Aggregate information of associates that are not individually material is as follows:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Aggregate carrying amounts of
individually immaterial associates
in the consolidated statements of
financial position /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,800 25,734 137,074 305,219
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Aggregate amounts of the
Group’s share of the
associates’ profits less
losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,957) (4,020) (7,575) (2,784) (10,346)
18 EQUITY SECURITIES DESIGNATED AT FVOCI
(a) The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Investments in unlisted equity
securities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,514,674 1,453,024 3,170,572 3,417,433
Investments in equity securities
listed in Chinese Mainland /H1118/H1118/H1118/H1118/H111818,351 291,365 195,297 74,266
1,533,025 1,744,389 3,365,869 3,491,699
The unlisted equity securities were mainly investments in entities established in Chinese Mainland. The Group
designated these investments as financial assets measured at FVOCI (non-recycling), as the investments are held for
strategic purposes. As at 31 December 2022, 2023 and 2024 and 30 June 2025, RMB1,133,807,000,
RMB1,133,807,000, RMB2,833,601,000 and RMB2,855,552,000 represents the Group’s investments in a related
party, CXMT Corporation (ʮ̡)*, an entity principally engaged in the design, manufacture
and sales of semiconductor products.
Dividends of RMB4,868,000, RMBNil, RMB1,259,000 and RMBNil were received by the Group on these
investments during the years ended 31 December 2022, 2023 and 2024 and the six months ended 30 June 2025,
respectively (see Note 5).
* The entity’s official name is in Chinese. The English translation of the entity’s name is for identification only.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 465 ---
(b) The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Investments in unlisted equity
securities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,265,433 1,308,433 3,016,601 3,089,940
Investments in equity securities
listed in Chinese Mainland /H1118/H1118/H1118/H1118/H111818,351 21,299 16,355 23,675
1,283,784 1,329,732 3,032,956 3,113,615
19 FINANCIAL ASSETS AND LIABILITIES MEASURED AT FVPL
(a) The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current assets
– Private equity funds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880,000 145,612 210,894 209,150
Current assets
– Wealth management products /H1118/H1118/H1118/H11181,857,548 1,805,558 120,000 60,714
– Foreign exchange forward
contracts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 1,789
1,857,548 1,805,558 120,000 62,503
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current liabilities
– Foreign exchange forward
contracts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 4,662
All non-current assets are investments in unlisted private equity funds established in Chinese Mainland and are
measured at FVPL.
Wealth management products are issued by financial institutions in Chinese Mainland. During the Track
Record Period, the investment period of the wealth management products ranged from 31 to 365 days with expected
annual yield ranging from 0.50% to 3.40%.
APPENDIX I ACCOUNTANTS’ REPORT
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(b) The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current assets
– Private equity funds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880,000 125,600 190,882 189,138
Current assets
– Wealth management products /H1118/H1118/H1118/H11181,517,438 1,504,350 – –
– Foreign exchange forward
contracts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 1,789
1,517,438 1,504,350 – 1,789
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current liabilities
– Foreign exchange forward
contracts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 4,258
20 INVENTORIES
(a) The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,192,425 1,339,048 1,134,950 1,057,724
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118261,161 289,985 426,950 645,774
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118928,945 706,050 1,156,432 980,717
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 859 3,823
2,382,531 2,335,083 2,719,191 2,688,038
Less: write-down of inventories /H1118/H1118/H1118(228,655) (344,217) (372,823) (287,389)
2,153,876 1,990,866 2,346,368 2,400,649
The analyses of the amounts of inventories recognised as cost of sales and included in profit or loss are as
follows:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Carrying amount of
inventories consumed /H1118/H11184,251,890 3,885,342 4,651,981 2,332,884 2,683,993
Add: write-down of
inventories, net /H1118/H1118/H1118/H1118/H1118/H1118136,175 115,562 28,606 (33,305) (85,434)
4,388,065 4,000,904 4,680,587 2,299,579 2,598,559
APPENDIX I ACCOUNTANTS’ REPORT
– I-66 –


--- page 467 ---
(b) The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118891,586 681,704 666,953 665,105
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118170,877 97,833 170,750 255,478
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118367,556 224,918 266,360 281,140
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,802 9,773
1,430,019 1,004,455 1,106,865 1,211,496
Less: write-down of inventories /H1118/H1118/H1118(130,437) (172,870) (152,335) (115,501)
1,299,582 831,585 954,530 1,095,995
21 TRADE AND BILLS RECEIV ABLES
(a) The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables due from third
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118142,625 114,147 212,601 227,305
Less: loss allowance (Note 32(a)) /H1118/H1118 (504) – (585) –
142,121 114,147 212,016 227,305
Bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,809 13,133 19,775 17,557
Financial assets measured at
amortised cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118173,930 127,280 231,791 244,862
All of the trade and bills receivables are expected to be recovered within one year.
Ageing analyses
Trade receivables (net of loss allowance), based on the invoice date, are with the following ageing
analyses as of the end of each reporting period:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134,502 114,147 211,221 227,305
More than 3 months but less
than 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,619 – 795 –
142,121 114,147 212,016 227,305
Further details on the Group’s credit policy and credit risk arising from trade receivables are set out in
Note 32(a).
(b) The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables due from:
– subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118700,183 1,879,545 1,775,500 1,529,528
– third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118808 1,534 5,317 10,277
700,991 1,881,079 1,780,817 1,539,805
APPENDIX I ACCOUNTANTS’ REPORT
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22 PREPAYMENTS AND OTHER CURRENT ASSETS AND OTHER NON-CURRENT ASSETS
(a) Prepayments and other current assets
(i) The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Other receivables:
– receivable from NCI arose from
the acquisition of a subsidiary
(Notes (i) and 33) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 171,561 154,685
– deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,567 15,715 39,124 37,369
– others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,288 429 5,053 3,111
14,855 16,144 215,738 195,165
Less: loss allowance (Note 32(a)) /H1118/H1118 (2,298) (3,518) (8,086) (9,136)
Financial assets measured at
amortised cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,557 12,626 207,652 186,029
Prepayments for inventories to third
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,082 24,183 24,533 36,845
Input V A T deductible /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862,261 81,968 108,454 123,332
Current portion of other non-current
assets (Note 22(b)(i)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118194,000 243,000 250,000 349,806
Deposits for dividends to be
distributed (Note (ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 204,642
Prepayments for costs incurred in
connection with the proposed
initial listing of the H shares of
the Company (Note (iii)) /H1118/H1118/H1118/H1118/H1118/H1118– – – 15,077
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,197 24,243 17,975 26,714
320,097 386,020 608,614 942,445
All of the prepayments and other receivables are expected to be recovered or recognised as expenses within
one year.
Notes:
(i) The receivable from NCI is secured by the NCI’s equity interests in XySemi and properties owned by
the NCI.
(ii) Pursuant to the shareholders’ approval at the Company’s annual general meeting held on 16 May 2025
and the subsequent announcement on 7 June 2025 regarding the delay in dividend payment due to the
changes in number of ordinary shares arising from the exercise of share options, the Company has
placed dividends to be distributed of RMB204,642,000 to the China Securities Depository and Clearing
Corporation Limited in escrow as at 30 June 2025, and the amount was subsequently distributed to the
Company’s shareholders on 3 July 2025.
(iii) The balance at 30 June 2025 included costs related to the proposed initial listing of the H shares of the
Company on The Stock Exchange of Hong Kong Limited, and it will be transferred to share premium
within equity upon the listing of the H shares of the Company on The Stock Exchange of Hong Kong
Limited.
APPENDIX I ACCOUNTANTS’ REPORT
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(ii) The Company
As at December 31 As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Other receivables:
– amounts due from subsidiaries /H1118/H1118/H1118105,288 388,700 1,135,731 581,030
– deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,027 5,958 6,363 6,718
– others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118115 182 2,608 1,180
111,430 394,840 1,144,702 588,928
Less: loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(590) (1,171) (2,923) (4,688)
Financial assets measured at
amortised cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,840 393,669 1,141,779 584,240
Prepayments for inventories to third
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,321 22,328 23,862 32,391
Input V A T deductible /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,778 16,163 40,613 20,864
Current portion of other non-current
assets (Note 22(b)(ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118194,000 243,000 250,000 349,806
Deposits for dividends to be
distributed (Note 22(a)(ii)) /H1118/H1118/H1118/H1118/H1118 – – – 204,642
Prepayments for costs incurred in
connection with the proposed
initial listing of the H shares of
the Company (Note 22(a)(i)) /H1118/H1118/H1118/H1118 – – – 15,077
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,936 22,559 16,561 25,143
385,875 697,719 1,472,815 1,232,163
(b) Other non-current assets
(i) The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Prepayments for suppliers’
production capacity (Note) /H1118/H1118/H1118/H1118/H11181,000,006 806,006 563,006 349,806
Prepayments for acquisitions of
property, plant and equipment and
intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118166,835 9,860 89,262 106,841
1,166,841 815,866 652,268 456,647
Less: current portion of other non-
current assets
(Note 22(a)(i))
– prepayments for suppliers’
production capacity expected to
be settled within one year /H1118/H1118/H1118/H1118/H1118/H1118(194,000) (243,000) (250,000) (349,806)
972,841 572,866 402,268 106,841
Note: The prepayments for suppliers’ production capacity are deposits paid to suppliers to secure these
suppliers’ production capacities for a certain period, and will be deducted by subsequent purchases of
inventories from these suppliers.
APPENDIX I ACCOUNTANTS’ REPORT
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(ii) The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Prepayments for suppliers’
production capacity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,000,006 806,006 563,006 349,806
Prepayments for acquisitions of
property, plant and equipment and
intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,035 1,954 80,806 11,043
1,008,041 807,960 643,812 360,849
Less: current portion of other non-
current assets
(Note 22(a)(ii))
– prepayments for suppliers’
production capacity expected to
be settled within one year /H1118/H1118/H1118/H1118/H1118/H1118(194,000) (243,000) (250,000) (349,806)
814,041 564,960 393,812 11,043
23 CASH AT BANK AND ON HAND AND OTHER CASH FLOW INFORMATION
(a) Cash at bank and on hand comprise:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash at bank and on hand in the
consolidated statements of
financial position /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,874,850 7,265,862 9,128,010 7,863,121
Less: accrued interest arising from
deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(87,645) (134,974) (23,851) (33,444)
Cash and cash equivalents in the
consolidated statements of cash
flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,787,205 7,130,888 9,104,159 7,829,677
As at 31 December 2022, 2023 and 2024 and 30 June 2025, cash at bank and on hand amounted to
RMB6,060,859,000, RMB4,335,169,000, RMB6,415,980,000 and RMB5,514,527,000, respectively, are placed at
financial institutions in Chinese Mainland. Remittance of funds out of the Chinese Mainland is subject to relevant
rules and regulations of foreign exchange control.
APPENDIX I ACCOUNTANTS’ REPORT
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(b) Reconciliations of liabilities arising from financing activities
The table below details changes in the Group’s liabilities from financing activities, including both cash and
non-cash changes. Liabilities arising from financing activities are liabilities for which cash flows were, or future cash
flows will be, classified in the Group’s consolidated statements of cash flows as cash flows from financing activities.
Bank loans
Unvested
restricted shares
repurchase
obligation Lease liabilities Total
RMB’000 RMB’000 RMB’000 RMB’000
(Note 27) (Note 25) (Note 28)
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 434,320 140,401 574,721
Changes from financing cash flows:
Capital element of lease rentals paid /H1118/H1118/H1118/H1118 – – (31,353) (31,353)
Interest element of lease rentals paid /H1118/H1118/H1118/H1118 – – (6,973) (6,973)
Purchase of forfeited restricted shares /H1118/H1118/H1118/H1118 – (34,472) – (34,472)
Total changes from financing cash flows /H1118 – (34,472) (38,326) (72,798)------ ------ ------ ------
Other changes:
Finance costs (Note 6(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 916 6,973 7,889
Net increase in lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 15,286 15,286
Dividends in relation to unvested restricted
shares (Note 31(d)(ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (4,849) – (4,849)
Restricted shares vested (Note 31(d)(ii)) /H1118/H1118 – (105,020) – (105,020)
Total other changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (108,953) 22,259 (86,694)------
------ ------ ------
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 290,895 124,334 415,229
Bank loans
Unvested
restricted shares
repurchase
obligation Lease liabilities Total
RMB’000 RMB’000 RMB’000 RMB’000
(Note 27) (Note 25) (Note 28)
At 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 290,895 124,334 415,229
Changes from financing cash flows:
Capital element of lease rentals paid /H1118/H1118/H1118/H1118 – – (42,103) (42,103)
Interest element of lease rentals paid /H1118/H1118/H1118/H1118 – – (6,659) (6,659)
Purchase of forfeited restricted shares /H1118/H1118/H1118/H1118 – (10,292) – (10,292)
Total changes from financing cash flows /H1118 – (10,292) (48,762) (59,054)------ ------ ------ ------
Other changes:
Finance costs (Note 6(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 456 6,659 7,115
Net increase in lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 34,035 34,035
Dividends in relation to unvested restricted
shares (Note 31(d)(ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (1,802) – (1,802)
Restricted shares vested (Note 31(d)(ii)) /H1118/H1118 – (87,250) – (87,250)
Total other changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (88,596) 40,694 (47,902)------
------ ------ ------
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 192,007 116,266 308,273
APPENDIX I ACCOUNTANTS’ REPORT
– I-71 –


--- page 472 ---
Bank loans
Unvested
restricted shares
repurchase
obligation Lease liabilities Total
RMB’000 RMB’000 RMB’000 RMB’000
(Note 27) (Note 25) (Note 28)
At 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 192,007 116,266 308,273
Changes from financing cash flows:
Proceeds from bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,269,193 – – 1,269,193
Repayment of bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(418,699) – – (418,699)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,660) – – (9,660)
Capital element of lease rentals paid /H1118/H1118/H1118/H1118 – – (44,299) (44,299)
Interest element of lease rentals paid /H1118/H1118/H1118/H1118 – – (5,558) (5,558)
Purchase of forfeited restricted shares /H1118/H1118/H1118/H1118 – (55,529) – (55,529)
Total changes from financing cash flows /H1118 840,834 (55,529) (49,857) 735,448------ ------ ------ ------
Other changes:
Finance costs (Note 6(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,633 4,062 5,558 19,253
Additions through acquisition of a
subsidiary (Note 33) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,754 – 7,180 54,934
Net increase in lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 21,989 21,989
Restricted shares vested (Note 31(d)(ii)) /H1118/H1118 – (58,400) – (58,400)
Total other changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,387 (54,338) 34,727 37,776------
------ ------ ------
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118898,221 82,140 101,136 1,081,497
Bank loans
Unvested
restricted shares
repurchase
obligation Lease liabilities Total
RMB’000 RMB’000 RMB’000 RMB’000
(Note 27) (Note 25) (Note 28)
At 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118898,221 82,140 101,136 1,081,497
Changes from financing cash flows:
Proceeds from bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118400,000 – – 400,000
Repayment of bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(678,489) – – (678,489)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,269) – – (11,269)
Capital element of lease rentals paid /H1118/H1118/H1118/H1118 – – (27,093) (27,093)
Interest element of lease rentals paid /H1118/H1118/H1118/H1118 – – (2,721) (2,721)
Total changes from financing cash flows /H1118 (289,758) – (29,814) (319,572)------ ------ ------ ------
Other changes:
Finance costs (Note 6(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,112 254 2,721 14,087
Net increase in lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 40,699 40,699
Restricted shares vested
(Note 31(d)(ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (51,009) – (51,009)
Total other changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,112 (50,755) 43,420 3,777------
------ ------ ------
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118619,575 31,385 114,742 765,702
APPENDIX I ACCOUNTANTS’ REPORT
– I-72 –


--- page 473 ---
Bank loans
Unvested
restricted shares
repurchase
obligation Lease liabilities Total
RMB’000 RMB’000 RMB’000 RMB’000
(Note 27) (Note 25) (Note 28)
At 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 192,007 116,266 308,273
Changes from financing cash flows:
Proceeds from bank loans (unaudited) /H1118/H1118/H1118400,000 – – 400,000
Interest paid (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,802) – – (2,802)
Capital element of lease rentals paid
(unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (26,998) (26,998)
Interest element of lease rentals paid
(unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (2,941) (2,941)
Purchase of forfeited restricted shares
(unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (49,579) – (49,579)
Total changes from financing cash flows
(unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118397,198 (49,579) (29,939) 317,680------ ------ ------ ------
Other changes:
Finance costs (Note 6(a)) (unaudited) /H1118/H1118/H1118/H11182,802 3,570 2,941 9,313
Net increase in lease liabilities
(unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 19,386 19,386
Restricted shares vested
(Note 31(d)(ii)) (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (58,400) – (58,400)
Total other changes (unaudited) /H1118/H1118/H1118/H1118/H1118/H11182,802 (54,830) 22,327 (29,701)------
------ ------ ------
At 30 June 2024 (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118400,000 87,598 108,654 596,252
(c) Total cash outflow for leases
Amounts included in the consolidated statements of cash flows for leases comprise the following:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Within operating cash
flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,171) (3,025) (3,151) (1,512) (1,380)
Within financing cash
flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(38,326) (48,762) (49,857) (29,939) (29,814)
(41,497) (51,787) (53,008) (31,451) (31,194)
APPENDIX I ACCOUNTANTS’ REPORT
– I-73 –


--- page 474 ---
24 TRADE PAYABLES
(a) The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables due to:
– third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118376,730 428,008 620,126 631,028
– related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118102,536 73,836 113,473 87,969
Financial liabilities measured at
amortised cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118479,266 501,844 733,599 718,997
All of the trade payables are expected to be settled within one year or are repayable on demand.
At 31 December 2022, 2023 and 2024 and 30 June 2025, the ageing analyses of trade payables, based on the
invoice date, are as follows:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118475,291 464,941 732,588 717,990
After 1 year but within 2 years /H1118/H1118/H1118/H1118 804 35,852 66 40
After 2 years but within 3 years /H1118/H1118/H1118 1,847 585 7 30
After 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,324 466 938 937
479,266 501,844 733,599 718,997
(b) The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables due to:
– third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118234,756 131,985 309,118 345,376
– related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,653 21,937 91,946 52,708
– subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118982 1,002 4,259 8,663
293,391 154,924 405,323 406,747
APPENDIX I ACCOUNTANTS’ REPORT
– I-74 –


--- page 475 ---
25 ACCRUALS AND OTHER PAYABLES
(a) The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Staff cost payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118234,859 95,498 291,238 202,644
Unvested restricted shares
repurchase obligation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118290,895 192,007 82,140 31,385
Payables for consultancy and
technology fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,555 32,272 70,583 80,924
Dividends payable (Note (i)) /H1118/H1118/H1118/H1118/H1118 – – – 225,575
Consideration payable for an
acquisition
of a subsidiary (Note 33) /H1118/H1118/H1118/H1118/H1118/H1118– – 15,123 –
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,833 16,084 40,328 17,875
Financial liabilities measured at
amortised cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118576,142 335,861 499,412 558,403
Other taxes and levies payables /H1118/H1118/H1118 22,484 15,800 23,319 35,121
598,626 351,661 522,731 593,524
All of the accruals and other payables are expected to be settled within one year or are repayable on demand.
Note i: As mentioned in Note 22(a)(ii), the amount has been paid on 3 July 2025.
(b) The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Amounts due to subsidiaries /H1118/H1118/H1118/H1118/H1118599,719 500,006 508,751 531,426
Staff cost payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111875,397 28,564 90,475 52,761
Unvested restricted shares
repurchase obligation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118290,895 192,007 82,140 31,385
Payables for consultancy and
technology fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,988 7,462 46,830 54,648
Dividends payable (Note 25(a)(i)) /H1118/H1118 – – – 225,575
Consideration payable for an
acquisition
of a subsidiary (Note 33) /H1118/H1118/H1118/H1118/H1118/H1118– – 15,123 –
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,337 2,333 9,853 4,641
Financial liabilities measured at
amortised cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118980,336 730,372 753,172 900,436
Other taxes and levies payables /H1118/H1118/H1118 10,872 6,473 10,749 8,120
991,208 736,845 763,921 908,556
APPENDIX I ACCOUNTANTS’ REPORT
– I-75 –


--- page 476 ---
26 CONTRACT LIABILITIES
(a) The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Advances received from customers
– third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111882,201 85,169 93,161 133,400
– related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118716 2,922 1,371 1,824
82,917 88,091 94,532 135,224
The movements in contract liabilities during the Track Record Period are set out below:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Balance at 1 January /H1118/H1118/H1118/H111869,159 82,917 88,091 88,091 94,532
Increase in contract
liabilities as a result of
receipts in advance /H1118/H1118/H1118/H111881,877 87,035 92,865 91,593 114,660
Decrease in contract
liabilities as a result of
recognising revenue
during the year/period /H1118/H1118 (68,119) (81,861) (86,424) (78,852) (73,968)
Balance at 31
December/30 June /H1118/H1118/H1118/H111882,917 88,091 94,532 100,832 135,224
Contract liabilities primarily arose from the considerations received from customers before the Group
satisfying performance obligations. All of the contract liabilities are expected to be recognised as revenue within one
year.
(b) The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Advances received from customers:
– third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,295 14,372 23,632 31,948
– related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118641 2,580 311 104
– subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 88,124 – –
13,936 105,076 23,943 32,052
APPENDIX I ACCOUNTANTS’ REPORT
– I-76 –


--- page 477 ---
27 BANK LOANS
(a) The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Unguaranteed and unsecured bank
loans repayable within one year /H1118/H1118 – – 898,221 619,575
(b) The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Unguaranteed and unsecured bank
loans repayable within one year /H1118/H1118 – – 719,700 619,575
28 LEASE LIABILITIES
(a) The Group
At the end of each reporting period, the lease liabilities were repayable as follows:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,433 41,876 53,113 62,246------ ------ ------ ------
After 1 year but within 2 years /H1118/H1118/H1118/H111834,393 40,004 35,038 30,737
After 2 years but within 5 years /H1118/H1118/H1118 55,508 34,386 12,985 21,759
89,901 74,390 48,023 52,496------ ------ ------ ------
124,334 116,266 101,136 114,742
(b) The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,344 20,014 25,426 28,190----- ----- ----- -----
After 1 year but within 2 years /H1118/H1118/H1118/H111819,311 20,561 13,630 1,185
After 2 years but within 5 years /H1118/H1118/H1118 28,389 8,570 543 –
47,700 29,131 14,173 1,185----- ----- ----- -----
68,044 49,145 39,599 29,375
APPENDIX I ACCOUNTANTS’ REPORT
– I-77 –


--- page 478 ---
29 INCOME TAX IN THE CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(a) Taxation in the consolidated statements of financial position represent:
The Group
Y ear ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Balance of income tax
payable (net of prepaid
income tax) at the
beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111883,373 (32,920) (24,668) (24,668) 28,297
Provision for the year
(Note 7(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118253,303 19,555 43,877 5,893 14,072
Under/(over)-provision in
respect of prior years
(Note 7(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,072 (2,822) 2,345 2,118 595
Income tax
(paid)/refunded /H1118/H1118/H1118/H1118/H1118/H1118(369,504) (8,077) 4,769 20,527 (54,188)
(Credited)/charged to
reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,108) – – – 31,697
Additions through
acquisition of a
subsidiary (Note 33) /H1118/H1118/H1118 – – 1,946 – –
Exchange adjustments /H1118/H1118/H1118 (56) (404) 28 (119) (11)
Balance of income tax
payable (net of prepaid
income tax) at the end
of the year/period /H1118/H1118/H1118/H1118/H1118(32,920) (24,668) 28,297 3,751 20,462
Represented by:
Income tax payable /H1118/H1118/H1118/H1118/H11181,422 2,703 28,311 5,292 21,402
Prepaid income tax /H1118/H1118/H1118/H1118/H1118(34,342) (27,371) (14) (1,541) (940)
(32,920) (24,668) 28,297 3,751 20,462
APPENDIX I ACCOUNTANTS’ REPORT
– I-78 –


--- page 479 ---
(b) Deferred tax assets and liabilities recognised:
(i) Movements of each component of deferred tax assets and liabilities
The components of deferred tax assets/(liabilities) recognised in the consolidated statements of financial position and the movements during the T rack Record Period are as
follows:
Deferred tax arising from: Unused tax losses
Unrealised profits
on intra-group
transactions
Write-down of
inventories
Share-based
payment Lease liabilities Right-of-use assets
Fair value
adjustments on
intangible assets and
subsequent
amortisation in
connection with
business
combinations
Fair value changes
of financial assets Others Net
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111867,973 56,646 10,342 21,724 17,557 (16,263) (13,962) (65,605) 14,200 92,612---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Credited/(charged) to the consolidated statement of profit
or loss (Note 7(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,974 29,192 12,249 (15,890) (778) 1,094 3,413 (2,902) (16,520) 46,832
Credited to reserves (Note 10) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 ––––––– 6,515 – 6,515
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 0– ( 7 ) 1 3–––– (43) (27)
At 31 December 2022 and 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118 104,957 85,838 22,584 5,847 16,779 (15,169) (10,549) (61,992) (2,363) 145,932---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Credited/(charged) to the consolidated statement of profit
or loss (Note 7(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,728 (45,902) 13,904 (1,978) (715) 874 2,387 19,474 4,354 53,126
Charged to reserves (Note 10) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 ––––––– (53,686) – (53,686)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118( 3 ) –225–– ( 1 ) ( 1 ) 4
At 31 December 2023 and 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118 165,682 39,936 36,490 3,871 16,069 (14,295) (8,162) (96,205) 1,990 145,376---- ---- ---- ---- ---- ---- ---- ---- ---- ----
(Charged)/credited to the consolidated statement of profit
or loss (Note 7(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(37,659) 17,755 (842) 11,718 (3,033) 2,320 2,583 26,007 4,591 23,440
Additions through acquisition of a subsidiary (Note 33) /H1118 – 11 2,605 – – 45 (6,694) – 146 (3,887)
Charged to reserves (Note 10) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 ––––––– (15,640) – (15,640)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(23) – 1 1––––– (13) (25)
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118128,000 57,702 38,264 15,589 13,036 (11,930) (12,273) (85,838) 6,714 149,264
APPENDIX I ACCOUNTANTS’ REPORT
– I-79 –


--- page 480 ---
Deferred tax arising from: Unused tax losses
Unrealised profits
on intra-group
transactions
Write-down of
inventories
Share-based
payment Lease liabilities Right-of-use assets
Fair value
adjustments on
intangible assets and
subsequent
amortisation in
connection with
business
combinations
Fair value changes
of financial assets Others Net
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118128,000 57,702 38,264 15,589 13,036 (11,930) (12,273) (85,838) 6,714 149,264
Credited/(charged) to the consolidated statement of profit
or loss (Note 7(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,915 (10,060) (10,306) 3,348 2,876 (3,104) 2,597 (951) 4,108 6,423
Charged to reserves (Note 10) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 ––––––– (25,922) – (25,922)
Reduction in equity securities designated at FVOCI /H1118/H1118/H1118 ––––––– 31,711 – 31,711
Share options exercised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 3,570 ––––– 3,570
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118( 1 ) –– 1 1–1–26 1 9
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118145,914 47,642 27,958 22,518 15,912 (15,033) (9,676) (80,998) 10,828 165,065
At 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118165,682 39,936 36,490 3,871 16,069 (14,295) (8,162) (96,205) 1,990 145,376
(Charged)/credited to the consolidated statement of profit
or loss (Note 7(a)) (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(18,513) 14,460 (6,052) 1,465 (2,729) 2,017 1,194 3,370 1,922 (2,866)
Credited to reserves (Note 10) (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118 ––––––– 33,321 – 33,321
Exchange adjustments (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 2 5––– ( 7 ) ––– ( 4 ) 1 4
At 30 June 2024 (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118147,194 54,396 30,438 5,336 13,333 (12,278) (6,968) (59,514) 3,908 175,845
APPENDIX I ACCOUNTANTS’ REPORT
– I-80 –


--- page 481 ---
(ii) Reconciliation to the consolidated statements of financial position
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Net deferred tax assets in the
consolidated statements of
financial position /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118234,424 269,918 269,055 269,831
Net deferred tax liabilities in the
consolidated statements of
financial position /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(88,492) (124,542) (119,791) (104,766)
145,932 145,376 149,264 165,065
(c) Deferred tax assets not recognised
In accordance with the accounting policy set out in Note 2(r), the Group has not recognised deferred tax assets
in respect of cumulative tax losses of RMB147,794,000, RMB152,839,000, RMB113,690,000 and RMB81,806,000
as at 31 December 2022, 2023 and 2024 and 30 June 2025, respectively, as it is not probable that future taxable profits
against which the losses can be utilised will be available in the relevant tax jurisdictions and entities. These tax losses
will expire in the following years:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
2026 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,622 7,154 6,246 5,358
2027 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,956 1,373 1,373 1,412
2028 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,096 4,322 1,853
2029 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 25,570 1,637
2030 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118115,286 115,286 47,563 28,081
2031 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,930 23,930 24,355 24,163
2032 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
2033 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 2,018
2034 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 1,819
2035 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 15,465
Unexpire /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 4,261 –
147,794 152,839 113,690 81,806
APPENDIX I ACCOUNTANTS’ REPORT
– I-81 –


--- page 482 ---
30 EQUITY SETTLED SHARE-BASED TRANSACTIONS
Since 2020, the Group adopted several share-based payment plans pursuant to which the Group would grant
share options or restricted shares to eligible directors and other employees of the Group, who contribute directly to
the overall business performance and sustainable development of the Group.
(a) Share options
(i) The terms and conditions of the share options are granted as follows:
Number of
instruments Vesting conditions Contractual life
Share options granted to
directors:
– on 15 May 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,009,300 Include both performance and
service period conditions
2-5 years
Share options granted to
employees:
– on 15 January 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,656,960* Include both performance and
service period conditions
2-5 years
– on 26 July 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,104,830 Include both performance and
service period conditions
2-5 years
– on 21 July 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,743,800 Include both performance and
service period conditions
2-5 years
– on 15 May 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,772,100 Include both performance and
service period conditions
2-5 years
25,286,990
* The number of share options granted have been adjusted for the bonus issue took place in 2021.
APPENDIX I ACCOUNTANTS’ REPORT
– I-82 –


--- page 483 ---
(ii) The number and weighted average exercise prices of share options are as follows:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
Weighted
average
exercise
price
Number
of share
options
Weighted
average
exercise
price
Number
of share
options
Weighted
average
exercise
price
Number
of share
options
Weighted
average
exercise
price
Number
of share
options
Weighted
average
exercise
price
Number
of share
options
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
(unaudited) (unaudited)
Outstanding at the
beginning of the
year/period /H1118/H1118/H1118/H1118/H1118161.78 7,615 160.30 7,379 110.38 16,001 110.38 16,001 86.19 16,714
Granted during the
year/period /H1118/H1118/H1118/H1118/H1118– – 86.47 10,744 59.18 6,781 59.18 6,781 – –
Exercised during the
year/period /H1118/H1118/H1118/H1118/H1118– – – – – – – – 59.18 (1,301)
Forfeited and lapsed
during the year/period /H1118 173.85 (236) 160.77 (2,122) 119.79 (6,068) 114.43 (4,863) 130.77 (1,256)
Outstanding at the end of
the year/period /H1118/H1118/H1118/H1118160.30 7,379 110.38 16,001 86.19 16,714 89.90 17,919 84.72 14,157
Exercisable at the end of
the year/period /H1118/H1118/H1118/H1118 1,845 1,747 – – 999
The number of share options exercised was Nil, Nil, Nil and 1,301,000 during the years ended 31 December
2022, 2023 and 2024 and the six months ended 30 June 2025.
At 31 December 2022, the share options outstanding had an exercise price of RMB142.69 or RMB186.90 and
a weighted average remaining contractual life of 23 months.
At 31 December 2023, the share options outstanding had an exercise price of RMB142.07, RMB186.28 or
RMB86.47 and a weighted average remaining contractual life of 26 months.
At 31 December 2024, the share options outstanding had an exercise price of RMB142.07, RMB186.28,
RMB86.47 or RMB59.18 and a weighted average remaining contractual life of 23 months.
At 30 June 2025, the share options outstanding had an exercise price of RMB142.07, RMB186.28, RMB86.47
or RMB59.18 and a weighted average remaining contractual life of 19 months.
(iii) Fair value of share options and assumptions
The estimate of the fair value of the share options granted is measured based on Black-Scholes -Merton model.
Key assumptions used in determining the fair value of share options granted are as follows:
2023 2024
Fair value of share options and assumptions
Fair value at measurement date /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830.58 27.37
Share price /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118112.27 83.42
Exercise price /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111886.47 59.18
Expected volatility /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813.15%-16.25% 13.58%-15.30%
Option life /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181-4 years 1-4 years
Expected dividends /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.43%-0.64% 0.43%-0.64%
Risk-free interest rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.5%-2.75% 1.5%-2.75%
APPENDIX I ACCOUNTANTS’ REPORT
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Expected volatility is estimated based on the historic volatility, adjusted for any expected changes to future
volatility due to publicly available information.
Expected dividends are estimated based on historical dividends.
Risk-free interest rates are based on the benchmark interest rates for deposits placed at financial institutions
set by The People’s Bank of the PRC.
The Black-Scholes-Merton model has been used to estimate the fair value of the share options. The variables
and assumptions used in computing the fair value of the share options are based on the Company’s best estimate. The
fair values of share options will vary if different variables and assumptions are adopted.
Share options were granted under service conditions. These conditions have not been taken into account in the
grant date fair value measurement of the services received. There were no market conditions associated with the share
option grants.
(b) Restricted shares
(i) The terms and conditions of the restricted shares are as follows:
Number of instruments Vesting conditions
Restricted shares granted to directors:
– on 15 January 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118364,000* Include both performance and
service period conditions
Restricted shares granted to employees:
– on 15 January 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,558,844* Include both performance and
service period conditions
– on 26 July 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,416,942 Include both performance and
service period conditions
– on 3 December 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118258,300 Include both performance and
service period conditions
5,598,086
* The number of share options granted have been adjusted for the bonus issue took place in 2021.
(ii) The number and weighted average subscription price of restricted shares are as follows:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
Weighted
average
subscription
price
Number
of
restricted
shares
Weighted
average
subscription
price
Number
of
restricted
shares
Weighted
average
subscription
price
Number
of
restricted
shares
Weighted
average
subscription
price
Number
of
restricted
shares
Weighted
average
subscription
price
Number
of
restricted
shares
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
(unaudited) (unaudited)
Outstanding at the
beginning of the
year/period /H1118/H1118/H1118 78.43 5,538 77.67 3,745 77.28 2,484 77.28 2,484 76.63 1,071
V ested during the
year/period ( Note
31(d)(ii) ) /H1118/H1118/H1118/H111877.75 (1,351) 76.41 (1,142) 71.77 (814) 71.77 (814) 70.00 (729)
Forfeited during
the year/period
(Note 31(d)(ii) ) /H1118 75.93 (442) 82.80 (119) 85.91 (599) 86.14 (534) 73.70 (29)
Outstanding at the
end of the
year/period /H1118/H1118/H1118 77.67 3,745 77.28 2,484 76.63 1,071 77.06 1,136 92.30 313
APPENDIX I ACCOUNTANTS’ REPORT
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31 CAPITAL, RESERVES AND DIVIDENDS
(a) Movements in components of equity
The reconciliations between the opening and closing balances of each component of the Group’s consolidated
equity are set out in the consolidated statements of changes in equity. Details of the changes in the Company’s
individual components of equity during the Track Record Period are set out below:
Note
Share
capital
Share
premium
Treasury
share
reserve
Share-
based
payment
reserve
Fair value
reserve
Other
reserve
Retained
earnings Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January 2022 /H1118/H1118 667,467 7,760,165 (434,320) 331,578 305,474 333,734 3,478,636 12,442,734----- - - - - - - ----- - ---- - ---- ----- - ----- - - ----
Changes in equity for the year
ended 31 December 2022:
Total comprehensive income for
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– (32,068) – 2,228,191 2,196,123----- - - - - - - ----- - ---- - ---- ----- - ----- - - ----
Restricted shares vested /H1118/H1118/H1118/H1118 30(b) – 118,069 105,020 (118,069) – – – 105,020
Cancellation of shares /H1118/H1118/H1118/H1118/H111831(d)(ii) (442) (33,114) 33,556 –––––
Equity settled share-based
payment expenses /H1118/H1118/H1118/H1118/H1118/H111830 – – – 203,181 – 782 – 203,963
Dividends in relation to
unvested restricted shares /H1118/H1118 – – 4,84 9–––– 4,849
Dividends approved and paid /H1118/H1118 31(b) –––––– (707,515) (707,515)
(442) 84,955 143,425 85,112 – 782 (707,515) (393,683)----- ------ ----- ----- ----- ----- ----- ------
Balance at 31 December 2022
and 1 January 2023 /H1118/H1118/H1118/H1118 667,025 7,845,120 (290,895) 416,690 273,406 334,516 4,999,312 14,245,174----- - - - - - - ----- - ---- - ---- ----- - ----- - - ----
Changes in equity for the year
ended 31 December 2023:
Total comprehensive income for
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– 2,654 – 194,627 197,281----- - - - - - - ----- - ---- - ---- ----- - ----- - - ----
Restricted shares vested /H1118/H1118/H1118/H1118 30(b) – 100,585 87,250 (100,585) – – – 87,250
Cancellation of shares /H1118/H1118/H1118/H1118/H111831(d)(ii) (119) (9,717) 9,83 6–––––
Purchase of own shares /H1118/H1118/H1118/H1118 – – (101,991) –––– (101,991)
Equity settled share-based
payment expenses /H1118/H1118/H1118/H1118/H1118/H111830 – – – 97,138 – – – 97,138
Dividends in relation to
unvested restricted shares /H1118/H1118 – – 1,80 2–––– 1,802
Dividends approved and paid /H1118/H1118 31(b) –––––– (413,556) (413,556)
(119) 90,868 (3,103) (3,447) – – (413,556) (329,357)----- ------ ----- ----- ----- ----- ----- ------
Balance at 31 December 2023
and 1 January 2024 /H1118/H1118/H1118/H1118 666,906 7,935,988 (293,998) 413,243 276,060 334,516 4,780,383 14,113,098----- - - - - - - ----- - ---- - ---- ----- - ----- - - ----
APPENDIX I ACCOUNTANTS’ REPORT
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Note
Share
capital
Share
premium
Treasury
share
reserve
Share-
based
payment
reserve
Fair value
reserve
Other
reserve
Retained
earnings Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Changes in equity for the year
ended 31 December 2024:
Total comprehensive income for
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– 217,525 – 329,280 546,805----- - - - - - - ----- - ---- - ---- ----- - ----- - - ----
Restricted shares vested /H1118/H1118/H1118/H1118 30(b) – 66,271 58,400 (66,271) – – – 58,400
Cancellation of shares /H1118/H1118/H1118/H1118/H111831(d)(ii) (2,782) (247,532) 250,314 –––––
Purchase of own shares /H1118/H1118/H1118/H1118 – – (259,564) –––– (259,564)
Equity settled share-based
payment expenses /H1118/H1118/H1118/H1118/H1118/H111830 – – – 158,681 – – – 158,681
Reduction in equity securities
designated at FVOCI /H1118/H1118/H1118/H1118 –––– (43,624) – 43,624 –
Share of changes in associates’
other reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 ––––– 15,146 – 15,146
(2,782) (181,261) 49,150 92,410 (43,624) 15,146 43,624 (27,337)----- ------ ----- ----- ----- ----- ----- ------
Balance at 31 December 2024 /H1118 664,124 7,754,727 (244,848) 505,653 449,961 349,662 5,153,287 14,632,566
Balance at 1 January 2025 /H1118/H1118 664,124 7,754,727 (244,848) 505,653 449,961 349,662 5,153,287 14,632,566----- - - - - - - ----- - ---- - ---- ----- - ----- - - ----
Changes in equity for the six
months ended 30 June
2025: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Total comprehensive income for
the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– 92,668 – 206,864 299,532----- - - - - - - ----- - ---- - ---- ----- - ----- - - ----
Restricted shares vested /H1118/H1118/H1118/H1118 30(b) – 59,280 51,009 (59,280) – – – 51,009
Share options exercised /H1118/H1118/H1118/H1118 30(a) – (2,198) 111,340 (32,120) – – – 77,022
Cancellation of shares /H1118/H1118/H1118/H1118/H111831(d)(ii) (65) (5,393) 5,45 8–––––
Equity settled share-based
payment expenses /H1118/H1118/H1118/H1118/H1118/H111830 – – – 79,831 – 2,113 – 81,944
Reduction in equity securities
designated at FVOCI /H1118/H1118/H1118/H1118 –––– (2,153) – 2,153 –
Dividends approved /H1118/H1118/H1118/H1118/H1118/H1118 –––––– (225,575) (225,575)
Share of changes in associates’
other reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 ––––– 25,134 – 25,134
(65) 51,689 167,807 (11,569) (2,153) 27,247 (223,422) 9,534-----
------ ----- ----- ----- ----- ----- ------
Balance at 30 June 2025 /H1118/H1118/H1118 664,059 7,806,416 (77,041) 494,084 540,476 376,909 5,136,729 14,941,632
APPENDIX I ACCOUNTANTS’ REPORT
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(b) Dividends
(i) Dividends declared and approved during the Track Record Period
Y ears ended 31 December
Six months ended
30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Final dividends declared and
approved after the end of the
reporting period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118707,515 413,556 – 225,575
Pursuant to the shareholders’ approval at the annual general meeting held on 18 May 2022, a final dividend
of RMB1.06 per share totalled approximately RMB707,515,000 in respect of the year ended 31 December 2021 was
declared. The dividend of RMB707,515,000 was paid on 2 June 2022.
Pursuant to the shareholders’ approval at the annual general meeting held on 18 May 2023, a final dividend
of RMB0.62 per share totalled RMB413,556,000 for the year ended 31 December 2022 was paid on 23 June 2023.
The directors of the Company did not propose a final dividend for the year ended 31 December 2023 after the
end of the reporting period.
Pursuant to the shareholders’ approval at the annual general meeting held on 16 May 2025 and a supplementary
announcement made on 7 June 2025 regarding the changes in number of ordinary shares from the exercise of share
options, a final dividend of RMB0.34 per share totalled approximately RMB225,575,000 for the year ended 31
December 2024 was paid on 3 July 2025.
(c) Share capital
Issued share capital
Y ear ended 31 December Six months ended 30 June
2022 2023 2024 2025
Number
of shares
Number
of shares
Number
of shares
Number
of shares
’000 RMB’000 ’000 RMB’000 ’000 RMB’000 ’000 RMB’000
Ordinary
shares,
issued
and
fully
paid:
At 1
January /H1118667,467 667,467 667,025 667,025 666,906 666,906 664,124 664,124
Cancellation
of
shares /H1118 (442) (442) (119) (119) (2,782) (2,782) (65) (65)
At 31
December
/30
June /H1118/H1118667,025 667,025 666,906 666,906 664,124 664,124 664,059 664,059
APPENDIX I ACCOUNTANTS’ REPORT
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(d) Nature and purpose of reserves
(i) Share premium
The share premium represents the differences between the net considerations received and the nominal amount
of share capital issued by the Company.
(ii) Treasury share reserve
The reserve for the Company’s treasury shares comprises the cost of the Company’s shares held by the
Company and the cost arising from restricted shares repurchase obligation. Such treasury shares may be reissued
upon the exercise of share options, or in connection with any other issuance of shares that the board of directors may
consider to be in the Company’s best interest.
Number of shares
Repurchase of
ordinary shares
Unvested
restricted shares
repurchase
obligation Total
’000 RMB’000 RMB’000 RMB’000
(Note 25(a))
As at 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,538 – 434,320 434,320
Restricted shares vested /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,351) – (105,020) (105,020)
Restricted shares forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 33,556 (33,556) –
Cancellation of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(442) (33,556) – (33,556)
Dividends in relation to unvested
restricted shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (4,849) (4,849)
As at 31 December 2022 and 1
January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,745 – 290,895 290,895
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,026 101,991 – 101,991
Restricted shares vested /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,142) – (87,250) (87,250)
Restricted shares forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 9,836 (9,836) –
Cancellation of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(119) (9,836) – (9,836)
Dividends in relation to unvested
restricted shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1,802) (1,802)
As at 31 December 2023 and 1
January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,510 101,991 192,007 293,998
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,127 259,564 – 259,564
Restricted shares vested /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(814) – (58,400) (58,400)
Restricted shares forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 51,467 (51,467) –
Cancellation of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,782) (250,314) – (250,314)
As 31 December 2024 and 1 January
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,041 162,708 82,140 244,848
Restricted shares vested /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(729) – (51,009) (51,009)
Share options exercised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,301) (111,340) – (111,340)
Cancellation of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(65) (5,458) – (5,458)
As 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118946 45,910 31,131 77,041
(iii) Share-based payment reserve
Share-based payment reserve represents grant date fair value of share options and restricted shares granted to
directors of the Company and employees of the Group that has been recognised in accordance with the accounting
policy adopted for share-based payments in Note 2(q)(ii).
(iv) Exchange reserve
Exchange reserve comprises all foreign exchange differences arising from the translation of the financial
statements of operations that have a functional currency other than RMB and which are dealt with in accordance with
the accounting policies as set out in Note 2(t).
APPENDIX I ACCOUNTANTS’ REPORT
– I-88 –


--- page 489 ---
(v) Fair value reserve
The fair value reserve comprises the cumulative net change in the fair value of equity investments designated
at FVOCI that are held at the end of each reporting period (see Note 2(f)).
(vi) Other reserve
Other reserve mainly represents:
– PRC statutory reserve: the Company in Chinese Mainland is required to appropriate 10% of its after-tax
profit to the general reserve fund as determined until the cumulative amounts reach 50% of the
registered capital in accordance with the laws and regulations in Chinese Mainland. The transfer to this
reserve must be made before distribution of a dividend to equity shareholders. This reserve fund can be
utilised in setting off accumulated losses or increasing capital of the Company and is non-distributable
other than in liquidation; and
– the proportionate share of changes in net assets of associates.
(e) Capital management
The Group’s primary objectives when managing capital are to safeguard the Group’s ability to continue as a
going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, by
pricing products and services commensurately with the level of risk and by securing access to finance at a reasonable
cost.
The Group actively and regularly reviews and manages its capital structure to maintain a balance between the
higher shareholder returns that might be possible with higher levels of borrowings and the advantages and security
afforded by a sound capital position, and makes adjustments to the capital structure in light of changes in economic
conditions.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
32 FINANCIAL RISK MANAGEMENT AND FAIR V ALUES OF FINANCIAL INSTRUMENTS
Exposure to credit, liquidity, interest rate and currency risks arises in the normal course of the Group’s
business.
The Group’s exposure to these risks and the financial risk management policies and practices used by the
Group to manage these risks are described below.
(a) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a
financial loss to the Group. The Group’s credit risk is primarily attributable to trade and other receivables.
Management has a credit policy in place and the exposures to these credit risks are monitored on an ongoing basis.
The Group’s exposure to credit risk arising from cash at bank and on hand and bills receivables is limited because
the counterparties are banks and financial institutions with high credit standing, for which the Group considers having
low credit risk.
The Group does not provide any guarantees which would expose the Group to credit risk.
In respect of trade and other receivables, individual credit evaluations are performed on all customers and
debtors requiring credit over a certain amount. These evaluations focus on the customer’s and debtor’s past history
of making payments when due and current ability to pay, and take into account information specific to the customer
and debtor as well as pertaining to the economic environment in which the customer and debtor operates. The Group
typically requires payments in advance from customers before delivery of goods. The Group may grant certain
distributors and large customers with credit terms range from seven days to three months, depending on the results
of the Group’s credit assessment on these customers.
APPENDIX I ACCOUNTANTS’ REPORT
– I-89 –


--- page 490 ---
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer
rather than the industry in which the customers operate and therefore significant concentrations of credit risk
primarily arise when the Group has significant exposure to individual customers. As 31 December 2022, 2023 and
2024 and 30 June 2025, 67%, 73%, 42% and 40%, of the total trade receivables were due from the Group’s five
largest debtors respectively.
The Group measures loss allowances for trade receivables at an amount equal to lifetime ECLs, which is
calculated using a provision matrix. As the Group’s historical credit loss experience does not indicate significantly
different loss patterns for different customer segments or geographic regions, the loss allowance based on past due
status is not further distinguished between the Group’s different customer or geographic bases.
The following tables provide information about the Group’s exposure to credit risk and ECLs for trade
receivables as at 31 December 2022, 2023 and 2024 and 30 June 2025:
As at 31 December 2022
Expected loss rate
Gross carrying
amount Loss allowance
% RMB’000 RMB’000
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 134,502 –
3-12 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185.00 8,020 401
Over 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100.00 103 103
142,625 504
As at 31 December 2023
Expected loss rate
Gross carrying
amount Loss allowance
% RMB’000 RMB’000
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 114,147 –
As at 31 December 2024
Expected loss rate
Gross carrying
amount Loss allowance
% RMB’000 RMB’000
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.25 211,764 543
3-12 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185.00 837 42
212,601 585
As at 30 June 2025
Expected loss rate
Gross carrying
amount Loss allowance
% RMB’000 RMB’000
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 227,305 –
Expected loss rates are based on actual loss experience over the past three years. These rates are adjusted to
reflect differences between economic conditions during the period over which the historical data has been collected,
current conditions and the Group’s view of economic conditions over the expected lives of the receivables.
APPENDIX I ACCOUNTANTS’ REPORT
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Movements in the loss allowance account in respect of trade and other receivables during the years ended 31
December 2022, 2023 and 2024 and the six months ended 30 June 2024 (unaudited) and 2025 are as follows:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Balance at 1 January /H1118/H1118/H1118 2,059 2,802 3,518 3,518 8,671
Credit loss allowance
recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118743 820 3,667 2,133 465
Credit loss allowance
written off /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (104) – – –
Additions through
acquisition of a
subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,486 – –
Balance at 31 December/
30 June /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,802 3,518 8,671 5,651 9,136
(b) Liquidity risk
The Group’s policy is to regularly monitor its liquidity requirements and its compliance with lending covenants
and its relationship with finance providers, to ensure that it maintains sufficient reserves of cash and adequate
committed lines of funding from major financial institutions to meet its liquidity requirements in the short and longer
term.
The following tables show the remaining contractual maturities at 31 December 2022, 2023, and 2024 and 30
June 2025 of the Group’s financial liabilities, which are based on contractual undiscounted cash flows (including
interest payments computed using contractual rates or, if floating, based on rates current at the end of each reporting
period) and the earliest dates the Group can be required to pay:
As at 31 December 2022
Contractual undiscounted cash outflow
Within 1 year
or on demand
More than
1 year but less
than 2 years
More than
2 years but less
than 5 years Total
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118479,266 – – 479,266 479,266
Accruals and other
payables measured at
amortised cost (Note) /H1118/H1118 341,283 – – 341,283 341,283
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H111839,914 38,563 58,323 136,800 124,334
860,463 38,563 58,323 957,349 944,883
As at 31 December 2023
Contractual undiscounted cash outflow
Within 1 year
or on demand
More than
1 year but less
than 2 years
More than
2 years but less
than 5 years Total
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118501,844 – – 501,844 501,844
Accruals and other
payables measured at
amortised cost (Note) /H1118/H1118 240,363 – – 240,363 240,363
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H111847,072 43,008 35,853 125,933 116,266
789,279 43,008 35,853 868,140 858,473
APPENDIX I ACCOUNTANTS’ REPORT
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As at 31 December 2024
Contractual undiscounted cash outflow
Within 1 year
or on demand
More than
1 year but less
than 2 years
More than
2 years but less
than 5 years Total
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118733,599 – – 733,599 733,599
Accruals and other
payables measured at
amortised cost (Note) /H1118/H1118 208,174 – – 208,174 208,174
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118909,366 – – 909,366 898,221
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H111856,927 36,485 13,393 106,805 101,136
1,908,066 36,485 13,393 1,957,944 1,941,130
As at 30 June 2025
Contractual undiscounted cash outflow
Within 1 year
or on demand
More than
1 year but less
than 2 years
More than
2 years but less
than 5 years Total
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118718,997 – – 718,997 718,997
Accruals and other
payables measured at
amortised cost (Note) /H1118/H1118 355,759 – – 355,759 355,759
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118626,740 – – 626,740 619,575
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H111866,096 32,421 22,289 120,806 114,742
1,767,592 32,421 22,289 1,822,302 1,809,073
Note: Staff cost payables are excluded from “accruals and other payables measured at amortised cost” in the
context of liquidity risk, such disclosure is consistent with the Company’s A-share financial statements.
As at 30 June 2025
Contractual undiscounted cash outflow
Within 1 year or on
demand
More than 1 year
but less than 2
years
More than 2 years
but less than 5
years Total
RMB’000 RMB’000 RMB’000 RMB’000
Derivatives settled gross:
Foreign exchange forward
contracts:
– outflow /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(357,638) – – (357,638)
– inflow /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118352,976 – – 352,976
APPENDIX I ACCOUNTANTS’ REPORT
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(c) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Group’s interest rate risk arises primarily from bank loans.
Instruments bearing interest at variable rates and fixed rates expose the Group to cashflow interest rate risk and fair
value interest rate risk respectively. The Group regularly reviews its strategy on interest rate risk management in the
light of the prevailing market condition. The Group’s interest rate risk profile as monitored by management is set out
below.
(i) Interest rate risk profile
The following tables detail the interest rate risk profile of the Group’s borrowings at the end of each reporting
period:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Fixed rate borrowings:
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118124,334 116,266 101,136 114,742
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 207,703 579,554
Variable rate borrowings:
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 690,518 40,021
Total borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118124,334 116,266 999,357 734,317
(ii) Sensitivity analyses
At 31 December 2022, 2023 and 2024 and 30 June 2025, it is estimated that a general increase/decrease of 100
basis points in interest rates, with all other variables held constant, would have decreased/increased the Group’s
profits after tax and decreased/increased the Group’s retained earnings by approximately RMBNil, RMBNil,
RMB6,140,000 and RMB360,000, respectively.
The sensitivity analyses above indicate the exposure to cash flow interest rate risk arising from floating rate
non-derivative financial instruments held by the Group at the end of each reporting period. The impact on the Group’s
results after tax and retained earnings is estimated as an annualised impact on interest expense of such a change in
interest rates. The analyses are performed on the same basis for the Track Record Period.
(d) Currency risk
The Group is exposed to currency risk primarily through sales and purchases which give rise to receivables,
payables and cash balances that are denominated in a foreign currency, i.e. a currency other than the functional
currency of the operations to which the transactions relate. The currency giving rise to this risk is primarily United
States Dollars (“USD”). The Group ensures that the net exposure is kept to an acceptable level, by buying or selling
foreign currencies at spot rates where necessary to address short-term imbalances.
The Group uses foreign exchange forward contracts to manage its currency risk until the settlement date of
foreign currency receivables or payables and these foreign exchange forward contracts have a maturity of less than
one year from the reporting date. Changes in the fair value of foreign exchange forward contracts that economically
hedge monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
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(i) Exposure to currency risk
The following tables detail the Group’s primary exposure at the end of each reporting period to currency risk
arising from recognised assets or liabilities denominated in a currency other than the functional currency of the entity
to which they relate. For presentation purposes, the amounts of the exposure are shown in RMB, translated using the
spot rates at the year-end date. Differences resulting from the translation of the financial statements of foreign
operations into the Group’s presentation currency are excluded.
Exposure to foreign currency USD as at 31 December
Exposure to
foreign currency
USD as at
30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118754,926 2,443,531 2,281,877 2,375,021
Cash at bank /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118885,218 1,023,815 4,214,168 3,594,452
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(39,991) (2,535) (29,453) (16,159)
Accruals and other payables /H1118/H1118/H1118/H1118/H1118/H1118(35,146) (39,879) (35,861) (44,042)
1,565,007 3,424,932 6,430,731 5,909,272
Foreign exchange forward contracts /H1118 – – – 250,551
Net exposure arising from
recognised assets and liabilities /H1118/H1118 1,565,007 3,424,932 6,430,731 6,159,823
(ii) Sensitivity analyses
The following tables indicate the instantaneous change in the Group’s profit after tax (and retained earnings)
and other components of consolidated equity that would arise if foreign exchange rates to which the Group has
significant exposure at the end of each reporting period had changed at that dates, assuming all other risk variables
remained constant.
As at 31 December As at 30 June
2022 2023 2024 2025
Increase/
(decrease)
in foreign
exchange
rates
Increase/
(decrease)
in profit
after tax
and
retained
earnings
Increase/
(decrease)
in foreign
exchange
rates
Increase/
(decrease)
in profit
after tax
and
retained
earnings
Increase/
(decrease)
in foreign
exchange
rates
Increase/
(decrease)
in profit
after tax
and
retained
earnings
Increase/
(decrease)
in foreign
exchange
rates
Increase/
(decrease)
in profit
after tax
and
retained
earnings
RMB’000 RMB’000 RMB’000 RMB’000
USD /H1118/H1118/H1118/H1118/H1118/H1118/H11181% 14,403 1% 30,991 1% 57,132 1% 54,531
(1%) (14,403) (1%) (30,991) (1%) (57,132) (1%) (54,531)
The sensitivity analyses assume that the change in foreign exchange rates had been applied to re-measure those
financial instruments held by the Group which expose the Group to foreign currency risk at the end of the reporting
period, including inter-company payables and receivables within the Group which are denominated in a currency
other than the functional currencies of the lender or the borrower. The analyses exclude differences that would result
from the translation of the financial statements of foreign operations into the Group’s presentation currency. The
analyses are performed on the same basis for the Track Record Period.
APPENDIX I ACCOUNTANTS’ REPORT
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(e) Fair value measurement
(i) Financial assets and liabilities measured at fair value
Fair value hierarchy
The following tables present the fair value of the Group’s financial instruments measured at the end of
each reporting period on a recurring basis, categorised into the three-level fair value hierarchy as defined in
IFRS 13, Fair value measurement . The level into which a fair value measurement is classified is determined
with reference to the observability and significance of the inputs used in the valuation technique as follows:
 Level 1 valuations: Fair value measured using only Level 1 inputs, i.e. unadjusted quoted
prices in active markets for identical assets or liabilities at the
measurement date.
 Level 2 valuations: Fair value measured using Level 2 inputs, i.e. observable inputs which fail
to meet Level 1, and not using significant unobservable inputs.
Unobservable inputs are inputs for which market data are not available.
 Level 3 valuations: Fair value measured using significant unobservable inputs.
Fair value at
31 December
Fair value measurements as at
31 December 2022 categorised into
2022 Level 1 Level 2 Level 3
RMB’000 RMB’000 RMB’000 RMB’000
Equity securities designated
at FVOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,533,025 18,351 – 1,514,674
Equity securities measured
at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880,000 – – 80,000
Wealth management products /H1118 1,857,548 – – 1,857,548
Fair value at
31 December
Fair value measurements as at
31 December 2023 categorised into
2023 Level 1 Level 2 Level 3
RMB’000 RMB’000 RMB’000 RMB’000
Equity securities designated
at FVOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,744,389 291,365 – 1,453,024
Equity securities measured
at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118145,612 – – 145,612
Wealth management products /H1118 1,805,558 – – 1,805,558
Fair value at
31 December
Fair value measurements as at
31 December 2024 categorised into
2024 Level 1 Level 2 Level 3
RMB’000 RMB’000 RMB’000 RMB’000
Equity securities designated
at FVOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,365,869 195,297 – 3,170,572
Equity securities measured
at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118210,894 – – 210,894
Wealth management products /H1118 120,000 – – 120,000
APPENDIX I ACCOUNTANTS’ REPORT
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Fair value at
30 June
Fair value measurements as at
30 June 2025 categorised into
2025 Level 1 Level 2 Level 3
RMB’000 RMB’000 RMB’000 RMB’000
Equity securities designated at
FVOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,491,699 74,266 – 3,417,433
Equity securities measured at
FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118209,150 – – 209,150
Wealth management products /H1118 60,714 – – 60,714
Foreign exchange forward
contracts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,789 – 1,789 –
Foreign exchange forward
contracts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,662) – (4,662) –
The Group’s policy is to recognise transfers between levels of fair value hierarchy as at the end of each
reporting period in which they occur.
The movements during the Track Record Period in the balance of the Level 3 fair value measurements
of equity securities designated at FVOCI are as follows:
Y ears ended 31 December
Six months ended
30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Equity securities designated
at FVOCI
At 1 January /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,500,585 1,514,674 1,453,024 3,170,572
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880,000 78,332 1,529,668 131,848
Decreases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(700) (83,600) (59,013) (22,665)
Net unrealised gains or losses
recognised in OCI /H1118/H1118/H1118/H1118/H1118/H1118(15,800) 3,500 246,787 137,970
Transfer into Level 1 upon
listing of the equity
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(50,000) (60,000) – –
Exchange adjustments /H1118/H1118/H1118/H1118/H1118589 118 106 (292)
At 31 December/30 June /H1118/H1118/H1118/H11181,514,674 1,453,024 3,170,572 3,417,433
Apart from the above, there were no transfers between Level 1 and Level 2, or transfers into or out of
Level 3 during the Track Record Period.
Information about Level 3 fair value measurements
Below is a summary of significant unobservable inputs to the valuation of these major financial assets
together with information about the sensitivity of the fair value measurement to changes in unobservable inputs
at 31 December 2022, 2023 and 2024 and 30 June 2025:
Valuation techniques
Significant
unobservable inputs
Wealth management products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Discounted cash
flow method
Interest return rate
Equity securities designated at FVOCI and equity
securities measured at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Market approach
Discount for lack
of marketability
APPENDIX I ACCOUNTANTS’ REPORT
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With all other variables held constant, if the significant unobservable inputs applied in the valuation had
been 1% lower or higher than Group’s estimation as at 31 December 2022, 2023 and 2024 and 30 June 2025,
the fair value of wealth management products categorised into Level 3 would (decrease)/increase by the
amounts listed in tables below:
As at 31
December 2022
As at 31
December 2023
As at 31
December 2024
As at 30 June
2025
RMB’000 RMB’000 RMB’000 RMB’000
Interest return rate decrease 1% /H1118/H1118/H1118 (6,297) (2,884) (3) (456)
Interest return rate increase 1% /H1118/H1118/H1118 6,297 2,884 3 456
During the Track Record Period, the Group’s equity securities designated at FVOCI and measured at
FVPL are investments in non-listed entities of which fair values were substantially determined based on either
the latest round of equity financing obtained by these entities or based on market approach. Given the discount
for lack of marketability was not developed by the Group, the management of the Group did not carry out nor
present any information on sensitivity analysis.
(ii) Fair value of financial assets and liabilities carried at other than fair value
The carrying amounts of the Group’s financial instruments carried at amortised cost are not materially different
from their fair values as at 31 December 2022, 2023 and 2024 and 30 June 2025.
33 ACQUISITION OF A SUBSIDIARY
Acquisition of XySemi
On 18 October 2024, the Group, together with Hefei Stony Creek GigaDevice Chuangzhi V enture Capital Fund
Partnership (Limited Partnership) (ΥྫΆุ(Υྫ))* (hereinafter referred to as
“Shixi Capital”), Hefei State-owned Capital V enture Capital Co., Ltd. (ʮ̡)*
(hereinafter referred to as “Hefei State Owned Capital”), Hefei Guozheng Duoze Industrial Investment Partnership
(Limited Partnership) (਷͍εዣପุҳ༟ΥྫΆุ(Υྫ))* (hereinafter referred to as “Hefei Industrial
Investment”), entered into a share transfer agreement with the original shareholders of XySemi to acquire 70% of the
equity interests of XySemi in cash. Shixi Capital is an associate of the Group. The total consideration of this
acquisition was RMB581,000,000, among which the acquisition of 38.07% equity interests of XySemi by the Group
amounted to RMB316,000,000. As at 31 December 2024, the acquisition consideration amounting to RMB15,123,000
is yet to be paid by the Group.
As a result from Shixi Capital entrusted its voting rights to the Group, and Hefei State Owned Investment and
Hefei Industrial Investment entered into a concerted action agreement with the Group, the Group dictates 70% of the
voting rights in XySemi, and thus has control over XySemi. Upon completion of the acquisition on 18 December
2024, the Group controls 38.07% of the equity interests in XySemi.
The acquisition of XySemi contributed consolidated revenue of RMB6,883,000 and consolidated net loss of
RMB624,000 to the Group for the period from the acquisition date to 31 December 2024. Had the acquisition of
XySemi been completed on 1 January 2024, the Group’s consolidated revenue and net profit would have been
RMB7,642,893,000 and RMB1,159,975,000, respectively, for the year ended 31 December 2024.
* These entities’ official names are in Chinese. The English translations of these entities’ names are for
identification only.
APPENDIX I ACCOUNTANTS’ REPORT
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The identifiable assets and liabilities arising from the acquisition of XySemi are as follows:
On acquisition date
RMB’000
Property, plant and equipment (Note 12(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,738
Right-of-use assets (Note 13(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,729
Intangible assets (Note 14(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843,712
Deferred tax assets (Note 29(b)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,807
Other non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118184
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111887,982
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,095
Prepayments and other current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118255,132
Cash at bank and on hand /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859,857
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(27,835)
Accruals and other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(150,180)
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,550)
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(47,754)
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,180)
Income tax payable (Note 29(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,946)
Deferred tax liabilities (Note 29(b)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,694)
Total identifiable net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118286,097
Less: non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(177,180)
Add: Goodwill (Note 15) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118207,083
Total consideration for the identifiable net assets acquired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118316,000
Less: cash and cash equivalents acquired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(59,857)
Less: consideration payable outstanding at 31 December 2024 and settled in 2025
(Note 25) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(15,123)
Net cash outflow arising from the acquisition of XySemi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118241,020
34 COMMITMENTS
Commitments outstanding at each reporting period end of the Track Record Period not provided for in the
Historical Financial Information were as follows:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Contracted for capital injections into
equity securities measured at
FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118615,000 485,400 635,400 515,400
The Group has entered into various investment agreements to invest in certain private equity funds in future
periods.
APPENDIX I ACCOUNTANTS’ REPORT
– I-98 –


--- page 499 ---
35 RELATED PARTY TRANSACTIONS
(a) Key management personnel remuneration
Remuneration for key management personnel of the Group, including amounts paid to the Company’s directors
as disclosed in Note 8 and certain of the highest paid employees as disclosed in Note 9, is as follows:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Salaries, wages and other
benefits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,980 13,932 24,284 6,970 6,980
Contributions to defined
contribution retirement
schemes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118323 451 469 252 212
Share-based payments /H1118/H1118/H111812,164 12,047 25,694 6,063 11,698
42,467 26,430 50,447 13,285 18,890
Total remuneration is included in “staff costs” (see Note 6(b)).
(b) Related parties and their relationships with the Group
Name of related parties Relationship with the Group
Deep Simplicity Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118An associate
Hefei Reliance Memory Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118An associate
Transcputing Tech Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118An associate
CXMT Corporation (ʮ̡)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Note i
CXMT Memory Technologies, Inc. (ʮ̡)*
and its subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Note i
Unisoc (Shanghai) Technologies Co., Ltd. (ቚ(ɪऎ)ʮ̡)*
and its subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Note ii
Telink Semiconductor (Shanghai) Co., Ltd. ( इὋฆཥɿ(ɪऎ)ʮ
̡)* and its subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Note ii
Mr. Zhang Kedong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Note iii
Notes:
i. During the Track Record Period, Mr. Zhu Yiming, the Chairman of the Company, currently serves as the
Chairman of CXMT Corporation, the parent company of CXMT Memory Technologies, Inc..
ii. During the Track Record Period, Mr. Zhang Shuai, a former director of the Company, served as a
director of Unisoc (Shanghai) Technologies Co., Ltd. and Telink Semiconductor (Shanghai) Co., Ltd..
iii. Mr. Zhang Kedong, a former independent director of the Company, resigned on 16 December 2024.
* These entities’ official names are in Chinese. The English translations of these entities’ names are for
identification only.
APPENDIX I ACCOUNTANTS’ REPORT
– I-99 –


--- page 500 ---
(c) Transactions with related parties
The Group entered into the following related party transactions during the Track Record Period:
Y ears ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Sales of goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118181,612 120,644 16,059 15,941 158
Purchases of materials and
services /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118887,432 767,402 1,025,458 456,083 440,232
The above related party transactions will continue after the proposed H shares listing of the Company, but they
do not constitute connected transactions under Chapter 14A of the Listing Rules.
In April 2024, the Company made additional investments amounted to RMB1,500,000,000 in CXMT
Corporation. Upon completion of the investments, the Company held 1.88% of equity interests in CXMT
Corporation.
(d) Balances with related parties as at the end of each reporting period
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade in nature:
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118102,536 73,836 113,473 87,969
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118716 2,922 1,371 1,824
Accruals and other payables /H1118/H1118/H1118/H1118/H1118/H1118––– 1 1
36 NON-ADJUSTING EVENTS AFTER THE REPORTING PERIOD
There were no material subsequent events after 30 June 2025 and up to date of this report.
37 IMMEDIATE AND ULTIMATE CONTROLLING PARTY
At the end of each reporting period, the directors of the Company consider the immediate and ultimate
controlling party of the Company to be Mr. Zhu Yiming.
APPENDIX I ACCOUNTANTS’ REPORT
– I-100 –


--- page 501 ---
38 POSSIBLE IMPACT OF AMENDMENTS, NEW STANDARDS AND INTERPRETATIONS ISSUED
BUT NOT YET EFFECTIVE FOR THE TRACK RECORD PERIOD
Up to the date of issue of the Historical Financial Information, the IASB has issued a number of new or
amended standards, which are not yet effective for the accounting period beginning on 1 January 2025 and which
have not been adopted in the Historical Financial Information. These developments include the following:
Effective for accounting
periods beginning
on or after
Amendments to IFRS 9, Financial instruments and IFRS 7, Financial instruments:
disclosures — Contracts referencing nature-dependent electricity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
1 January 2026
Amendments to IFRS 9, Financial instruments and IFRS 7, Financial instruments:
disclosures — Amendments to the classification and measurement of financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
1 January 2026
Annual improvements to IFRS Accounting Standards — V olume 11 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 January 2026
IFRS 18, Presentation and disclosure in financial statements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 January 2027
IFRS 19, Subsidiaries without public accountability: disclosures /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 January 2027
Amendments to IFRS 10, Consolidated financial statements and IAS 28, Investments
in associates and joint ventures — Sale or contribution of assets between an
investor and its associate or joint venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
To be determined
The Group is in the process of making an assessment of what the impact of these developments is expected
to be in the period of initial application. So far it has concluded that the adoption of them is unlikely to have a
significant impact on the Group’s consolidated financial statements except for the following:
IFRS 18, Presentation and disclosure in financial statements
IFRS 18 will replace IAS 1 Presentation of financial statements and aims to improve the transparency and
comparability of information about an entity’s financial statements. IFRS 18 is effective for annual reporting periods
beginning on or after 1 January 2027 and is to be applied retrospectively.
Among other changes, under IFRS 18, entities are required to classify all income and expenses into five
categories in the statement of profit or loss, namely the operating, investing, financing, discontinued operations and
income tax categories. Entities are also required to provide specific disclosures about management-defined
performance measures in a single note in the financial statements.
The Group does not plan to early adopt IFRS 18. IFRS18 will impact the presentation of financial statements
and is not expected to have significant impact on the financial performance and positions of the Group.
SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company and its subsidiaries in respect of any
period subsequent to 30 June 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-101 –


--- page 502 ---
The following is the text of a report set out on pages IA-1 to IA-2 received from the
Company’ s reporting accountants, KPMG, Certified Public Accountants, Hong Kong, for the
purpose of incorporation in this prospectus. The information set out below is the unaudited
interim financial information of the Group for the nine months ended 30 September 2025, and
does not form part of the Accountants’ Report from the Company’ s reporting accountants,
KPMG, Certified Public Accountants, Hong Kong, as set out in Appendix I, and is included
herein for information purpose only.
REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION TO THE
DIRECTORS OF GIGADEVICE SEMICONDUCTOR INC.
Introduction
We have reviewed the interim financial information set out on pages IA-3 to IA-25 which
comprises the consolidated statement of financial position of GigaDevice Semiconductor Inc.
(the “Company”) and its subsidiaries (together, the “Group”) as at 30 September 2025 and the
consolidated statement of profit or loss and other comprehensive income, the consolidated
statement of changes in equity and the condensed consolidated statement of cash flows for the
nine months ended 30 September and explanatory notes. The directors are responsible for the
preparation and presentation of the interim financial information in accordance with IAS 34,
Interim financial reporting , as issued by the International Accounting Standards Board.
Our responsibility is to form a conclusion, based on our review, on this interim financial
information and to report our conclusion solely to you, as a body, in accordance with our
agreed terms of engagement, and for no other purpose. We do not assume responsibility
towards or accept liability to any other person for the contents of this report.
Scope of review
We conducted our review in accordance with Hong Kong Standard on Review
Engagements 2410, Review of Interim Financial Information Performed by the Independent
Auditor of the Entity (“HKSRE 2410”), as issued by the Hong Kong Institute of Certified
Public Accountants. A review of interim financial information consists of making inquiries,
primarily of persons responsible for financial and accounting matters, and applying analytical
and other review procedures. A review is substantially less in scope than an audit conducted
in accordance with Hong Kong Standards on Auditing and consequently does not enable us to
obtain assurance that we would become aware of all significant matters that might be identified
in an audit. Accordingly, we do not express an audit opinion.
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-1 –


--- page 503 ---
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the
interim financial information as at and for the nine months ended 30 September 2025 is not
prepared, in all material respects, in accordance with IAS 34, Interim financial reporting .
Other Matter
We draw attention to the fact that the consolidated statement of profit or loss and other
comprehensive income, the consolidated statement of changes in equity and the condensed
consolidated statement of cash flows for the nine months ended 30 September 2024 and the
relevant explanatory notes disclosed in the interim financial information have not been
reviewed in accordance with HKSRE 2410.
KPMG
Certified Public Accountants
8th Floor, Prince’s Building
10 Chater Road
Central, Hong Kong
31 December 2025
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-2 –


--- page 504 ---
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
for the nine months ended 30 September 2025 — unaudited
(Expressed in Renminbi (“RMB”))
Nine months ended
30 September
Note 2025 2024
RMB’000 RMB’000
(unaudited) (unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 6,831,634 5,649,597
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,214,116) (3,529,074)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,617,518 2,120,523
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183 238,531 246,619
Selling and distribution expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(345,332) (277,572)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(483,702) (355,040)
Research and development expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(860,006) (845,884)
Impairment loss on trade and other receivables /H1118/H1118/H1118 (2,170) (3,330)
Impairment loss on property, plant and equipment /H1118 7 (3,810) –
Impairment loss on intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 (1,903) –
Profit from operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,159,126 885,316
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184(a) (19,059) (13,480)
Share of profits less losses of associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(16,325) (4,696)
Profit before taxation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 1,123,742 867,140
Income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (19,342) (35,039)
Profit for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,104,400 832,101
The accompanying notes form part of the interim financial information.
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-3 –


--- page 505 ---
Nine months ended
30 September
Note 2025 2024
RMB’000 RMB’000
(unaudited) (unaudited)
Profit for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,104,400 832,101--------- ---------
Other comprehensive income for the period
(after tax):
Items that will not be reclassified to profit or
loss:
– Equity investments at fair value through other
comprehensive income — net movement in
fair value reserves (non-recycling) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118192,670 (71,657)
Items that may be reclassified subsequently to
profit or loss:
– Exchange differences on translation of
financial statements into presentation
currency /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(15,112) (14,215)
– Share of other comprehensive income of
associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1) 5
Other comprehensive income for the period /H1118/H1118/H1118/H1118 177,557 (85,867)---------
---------
Total comprehensive income for the period /H1118/H1118/H1118/H1118 1,281,957 746,234
Profit attributable to:
Equity shareholders of the Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,083,228 832,113
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,172 (12)
1,104,400 832,101
Total comprehensive income attributable to:
Equity shareholders of the Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,260,785 746,246
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,172 (12)
1,281,957 746,234
Earnings per share
Basic (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186(a) 1.64 1.26
Diluted (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186(b) 1.63 1.25
The accompanying notes form part of the interim financial information.
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-4 –


--- page 506 ---
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 30 September 2025 — unaudited
(Expressed in RMB)
As at
30 September
As at
31 December
Note 2025 2024
RMB’000 RMB’000
(unaudited)
Non-current assets
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 1,259,278 1,089,489
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188 114,382 97,984
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 697,375 604,215
Goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118617,185 617,185
Interests in associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118312,388 137,074
Equity securities designated at fair value through
other comprehensive income (“FVOCI”) /H1118/H1118/H1118/H1118/H1118/H111810 3,483,575 3,365,869
Financial assets measured at fair value through
profit or loss (“FVPL”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811 224,150 210,894
Other non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814(b) 127,561 402,268
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118286,157 269,055
7,122,051 6,794,033---------- ----------
Current assets
Financial assets measured at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811 62,657 120,000
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 2,566,955 2,346,368
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 249,687 231,791
Prepayments and other current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814(a) 736,467 608,614
Prepaid income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,826 14
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118371,682 –
Cash at bank and on hand /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 9,641,936 9,128,010
13,634,210 12,434,797---------- ----------
The accompanying notes form part of the interim financial information.
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-5 –


--- page 507 ---
As at
30 September
As at
31 December
Note 2025 2024
RMB’000 RMB’000
(unaudited)
Current liabilities
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 781,944 733,599
Accruals and other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 427,116 522,731
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118219,270 94,532
Financial liabilities measured at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811 2,253 –
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118619,575 898,221
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859,943 53,113
Income tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,691 28,311
2,149,792 2,330,507---------- ----------
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,484,418 10,104,290---------- ----------
Total assets less current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,606,469 16,898,323---------- ----------
Non-current liabilities
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,671 48,023
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111848,131 49,732
Other non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,000 2,000
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118103,662 119,791
206,464 219,546---------- ----------
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,400,005 16,678,777
Capital and reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118667,278 664,124
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,527,226 15,834,381
Total equity attributable to equity shareholders of
the Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,194,504 16,498,505
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118205,501 180,272
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,400,005 16,678,777
The accompanying notes form part of the interim financial information.
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-6 –


--- page 508 ---
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the nine months ended 30 September 2025 — unaudited
(Expressed in RMB)
Attributable to equity shareholders of the Company (unaudited)
Note
Share
capital
Share
premium
Treasury
share
reserve
Share-
based
payment
reserve
Exchange
reserve
Fair
value
reserve
Other
reserve
Retained
earnings Total
Non-
controlling
interests
Total
equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 18(b)) (Note 18(c))
Balance at 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118664,124 7,754,727 (244,848) 536,580 60,467 566,744 364,301 6,796,410 16,498,505 180,272 16,678,777----- -- ---- ----- ----- ----- ----- - - - - - -- ---- ------ ----- ------
Changes in equity for the nine months ended
30 September 2025:
Profit for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– ––––– 1,083,228 1,083,228 21,172 1,104,400
Other comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – (15,112) 192,670 (1) – 177,557 – 177,557
Total comprehensive income for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – – – (15,112) 192,670 (1) 1,083,228 1,260,785 21,172 1,281,957----- -- ---- ----- ----- ----- ----- - - - - - -- ---- ------ ----- ------
Restricted shares vested /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 88,562 76,274 (88,562) –––– 76,274 – 76,274
Share options exercised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,248 395,019 111,340 (99,366) –––– 410,241 – 410,241
Cancellation of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(94) (7,507) 7,60 1–––––– ––
Equity settled share-based payment expenses /H1118/H1118/H1118/H1118/H1118/H1118 – – – 107,408 – – 15,109 – 122,517 4,057 126,574
Reduction in equity securities designated at FVOCI /H1118/H1118/H1118 – – – – – (130,335) – 130,335 – – –
Dividends in relation to unvested restricted shares /H1118/H1118/H1118/H1118 –– 1 1 7––––– 1 1 7 – 1 1 7
Dividends approved and paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818(a)(ii) –– ––––– (225,575) (225,575) – (225,575)
Share of changes in associates’ other reserve /H1118/H1118/H1118/H1118/H1118/H1118 –– –––– 51,640 – 51,640 – 51,640
3,154 476,074 195,332 (80,520) – (130,335) 66,749 (95,240) 435,214 4,057 439,271----- ------ ----- ----- ----- ----- ----- ------ ------ ----- ------
Balance at 30 September 2025 (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118667,278 8,230,801 (49,516) 456,060 45,355 629,079 431,049 7,784,398 18,194,504 205,501 18,400,005
The accompanying notes form part of the interim financial information.
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-7 –


--- page 509 ---
Attributable to equity shareholders of the Company (unaudited)
Note
Share
capital
Share
premium
Treasury
share
reserve
Share-
based
payment
reserve
Exchange
reserve
Fair
value
reserve
Other
reserve
Retained
earnings Total
Non-
controlling
interests
Total
equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 18(b))
Balance at 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118666,906 7,935,988 (293,998) 444,071 42,580 453,712 336,885 5,613,429 15,199,573 – 15,199,573----- ------ ----- ----- ----- ----- ----- ------ ------ - - - ------
Changes in equity for the nine months ended
30 September 2024:
Profit for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– ––––– 832,113 832,113 (12) 832,101
Other comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – (14,215) (71,657) 5 – (85,867) – (85,867)
Total comprehensive income for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – – – (14,215) (71,657) 5 832,113 746,246 (12) 746,234----- ------ ----- ----- ----- ----- ----- ------ ------ - - - ------
Restricted shares vested /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 66,271 58,400 (66,271) –––– 58,400 – 58,400
Cancellation of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,034) (94,715) 95,74 9–––––– ––
Purchase of own shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (120,629) ––––– (120,629) – (120,629)
Equity settled share-based payment expenses /H1118/H1118/H1118/H1118/H1118/H1118 – – – 109,67 4–––– 109,674 – 109,674
Capital injection from non-controlling interests /H1118/H1118/H1118/H1118/H1118 –– ––––––– 4,500 4,500
Reduction in equity securities designated at FVOCI /H1118/H1118/H1118 – – – – – (264) – 264 – – –
Share of changes in associates’ other reserve /H1118/H1118/H1118/H1118/H1118/H1118 –– –––– (799) – (799) – (799)
(1,034) (28,444) 33,520 43,403 – (264) (799) 264 46,646 4,500 51,146----- ------ ----- ----- ----- ----- ----- ------ ------ --- ------
Balance at 30 September 2024 (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118665,872 7,907,544 (260,478) 487,474 28,365 381,791 336,091 6,445,806 15,992,465 4,488 15,996,953
The accompanying notes form part of the interim financial information.
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-8 –


--- page 510 ---
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the nine months ended 30 September 2025 — unaudited
(Expressed in RMB)
Nine months ended
30 September
Note 2025 2024
RMB’000 RMB’000
(unaudited) (unaudited)
Operating activities
Cash generated from operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,873,479 1,837,714
Income tax (paid)/refunded /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(77,833) 19,131
Net cash generated from operating activities /H1118/H1118/H1118 1,795,646 1,856,845---------- ----------
Investing activities
Payments for the purchase of property, plant and
equipment and intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(714,996) (341,930)
Proceeds from disposal of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,709 385
Investment in associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(140,000) (91,499)
Investment in equity securities designated at
FVOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(131,848) (1,525,000)
Proceeds from disposal of equity securities
designated at FVOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118253,735 739
Investment in equity securities measured at FVPL /H1118 (15,000) (60,000)
Proceeds from disposal of equity securities
measured at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,038 –
Purchase of wealth management products
measured at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (300,000)
Proceeds from redemption of wealth management
products measured at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,000 2,100,000
Net investment income received from financial
instruments measured at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,294 25,244
Purchase of time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,330,263) –
Proceeds from redemption of time deposits /H1118/H1118/H1118/H1118/H1118/H1118961,168 –
Acquisition of a subsidiary, net of cash acquired /H1118/H1118 (15,123) –
Net cash used in investing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,041,286) (192,061)---------- ----------
The accompanying notes form part of the interim financial information.
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-9 –


--- page 511 ---
Nine months ended
30 September
Note 2025 2024
RMB’000 RMB’000
(unaudited) (unaudited)
Financing activities
Proceeds from bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118400,000 700,000
Repayment of bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(678,489) –
Capital element of lease rentals paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(49,193) (38,287)
Interest element of lease rentals paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,018) (4,304)
Purchase of own ordinary shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (120,629)
Purchase of forfeited restricted shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,447) (49,579)
Proceeds from share options exercised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118410,241 –
Dividends paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818(a)(ii) (225,575) –
Expenses paid in connection with the proposed
initial listing of the H shares of the Company /H1118/H1118 (16,069) –
Capital injection from non-controlling interests /H1118/H1118/H1118 – 4,500
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(14,898) (5,606)
Net cash (used in)/generated from financing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(180,448) 486,095--------- ---------
Net increase in cash and cash equivalents /H1118/H1118/H1118/H1118/H1118 573,912 2,150,879
Cash and cash equivalents at the beginning of
the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,104,159 7,130,888
Effects of exchange rate changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(72,308) (60,291)
Cash and cash equivalents at the end of the
period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 9,605,763 9,221,476
The accompanying notes form part of the interim financial information.
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-10 –


--- page 512 ---
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION
(Expressed in RMB unless otherwise indicated)
1 BASIS OF PREPARATION
GigaDevice Semiconductor Inc. (the “Company”) was incorporated in the People’s Republic of China (the
“PRC”) on 6 April 2005 as a limited liability company. On 28 December 2012, the Company was converted from a
limited liability company into a joint stock limited liability company, and was listed on Shanghai Stock Exchange
on 18 August 2016.
The Company and its subsidiaries (“the Group”) are principally engaged in the design, research and
development, and sales of specialty memory chips, micro-control units, sensor chips, analog chips, and complete set
of systems and solutions.
The interim financial information has been prepared in accordance with IAS 34, Interim financial reporting ,
as issued by the International Accounting Standards Board (“IASB”). It was authorised for issue on 31 December
2025.
The interim financial information has been prepared in accordance with the same basis of preparation and
presentation and accounting policies adopted in the historical financial information for the years ended 31 December
2022, 2023 and 2024 and the six months ended 30 June 2025 (the “Historical Financial Information”) as disclosed
in Appendix I to the prospectus dated 31 December 2025 (the “Prospectus”) issued by the Company.
The preparation of an interim financial information in conformity with IAS 34 requires management to make
judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and
liabilities, income and expenses on a year to date basis. Actual results may differ from these estimates.
This interim financial information contains condensed consolidated financial statements and selected
explanatory notes. The notes include an explanation of events and transactions that are significant to an understanding
of the changes in financial position and performance of the Group since 31 December 2024 in the Historical Financial
Information as disclosed in Appendix I to the Prospectus. The condensed consolidated interim financial statements
and notes thereon do not include all of the information required for a full set of financial statements prepared in
accordance with IFRS Accounting Standards.
2 REVENUE AND SEGMENT REPORTING
The principal activities of the Group are the design, research and development, and sales of specialty memory
chips, micro-control units, sensor chips, analog chips, and complete set of systems and solutions.
(a) Revenue
(i) Disaggregation of revenue
Disaggregation of revenue from contracts with customers by major products or service lines is as follows:
Nine months ended 30 September
2025 2024
RMB’000 RMB’000
(unaudited) (unaudited)
Revenue from contracts with customers within the scope
of IFRS 15
Disaggregated by major products or service lines:
– Specialty memory chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,768,370 4,049,243
– Micro-control units /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,497,888 1,269,979
– Sensor chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118311,945 317,685
– Analog chips /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118250,793 5,338
– Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,638 7,352
6,831,634 5,649,597
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-11 –


--- page 513 ---
(b) Segment reporting
(i) Segment results
IFRS 8, Operating Segments , requires identification and disclosure of operating segment information based on
internal financial reports that are regularly reviewed by the Group’s chief operating decision maker for the purpose
of resources allocation and performance assessment. On this basis, as for the purpose of making decisions about
resources allocation and performance assessment, the Group’s management reviews the operating results of the Group
as a whole by products and services and the Group has determined that it only has one operating segment during the
nine months ended 30 September 2025 and 2024.
Disaggregation of revenue from contracts with customers by major products along with gross profit or loss as
provided to the Group’s management for the purposes of resource allocation and performance assessment of products
and services for the nine months ended 30 September 2025 and 2024 is set out below:
Nine months ended 30 September 2025 (unaudited)
Specialty
memory
chips
Micro-
control units Sensor chips Analog chips Others
Less: write-
down of
inventories
recognised Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,768,370 1,497,888 311,945 250,793 2,638 – 6,831,634
Gross profit/(loss) /H1118/H11181,929,198 547,235 56,348 100,828 2,603 (18,694) 2,617,518
Nine months ended 30 September 2024 (unaudited)
Specialty
memory
chips
Micro-
control units Sensor chips Analog chips Others
Less: write-
down of
inventories
recognised Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,049,243 1,269,979 317,685 5,338 7,352 – 5,649,597
Gross profit/(loss) /H1118/H11181,662,546 503,458 55,648 451 7,216 (108,796) 2,120,523
(ii) Geographic information
Information about the Group’s revenue from external customers, presented based on their location of
registration, is as follows:
Nine months ended 30 September
2025 2024
RMB’000 RMB’000
(unaudited) (unaudited)
Chinese Mainland /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,058,494 1,429,029
Hong Kong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,188,036 2,585,873
Taiwan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118925,396 940,511
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118659,708 694,184
6,831,634 5,649,597
The non-current assets of the Group are substantially located or allocated to operations in Chinese Mainland.
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-12 –


--- page 514 ---
3 OTHER INCOME
Nine months ended 30 September
2025 2024
RMB’000 RMB’000
(unaudited) (unaudited)
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118216,123 245,023
Net gain from financial assets and liabilities measured
at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,992 18,258
Dividends from equity securities designated at FVOCI /H1118/H1118/H1118/H1118/H1118 183 –
Government grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,557 37,284
Net loss on foreign exchange differences /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(26,656) (61,990)
Net (loss)/gain on disposal of property, plant and equipment
and other non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,303) 301
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,635 7,743
238,531 246,619
4 PROFIT BEFORE TAXATION
Profit before taxation is arrived at after charging:
(a) Finance costs
Nine months ended 30 September
2025 2024
RMB’000 RMB’000
(unaudited) (unaudited)
Interest on bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,741 5,606
Interest on lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,018 4,304
Interest on unvested restricted shares repurchase obligation /H1118/H1118 300 3,570
19,059 13,480
(b) Other items
Nine months ended 30 September
2025 2024
RMB’000 RMB’000
(unaudited) (unaudited)
Cost of inventories (Note 12) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,185,727 3,514,825
Depreciation charges:
– property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118199,898 212,695
– right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111842,695 33,017
Amortisation of intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118128,393 95,032
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118563 –
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-13 –


--- page 515 ---
5 INCOME TAX
Taxation in the consolidated statement of profit or loss and other comprehensive income represents:
Nine months ended 30 September
2025 2024
RMB’000 RMB’000
(unaudited) (unaudited)
Current tax – Chinese Mainland
Provision for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,396 27,653
Under-provision in respect of prior year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,306 2,345
Current tax – Overseas
Provision for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,049 1,463
Deferred tax
Origination and reversal of temporary differences /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(27,409) 3,578
19,342 35,039
Notes:
(i) Entities of the Group established in Chinese Mainland were subject to the PRC Corporate Income Tax
rate of 25% during the nine months ended 30 September 2025 (nine months ended 30 September 2024:
25%).
The provision for Hong Kong Profits Tax for the nine months ended 30 September 2025 was calculated
at 16.5% of the estimated assessable profits for the period (nine months ended 30 September 2024:
16.5%). During the nine months ended 30 September 2025, a subsidiary of the Group was under the
two-tiered profits tax rate regime, i.e. the first Hong Kong Dollars (“HK$”) 2,000,000 of assessable
profits were taxed at 8.25% and the remaining assessable profits were taxed at 16.5%.
Taxation for subsidiaries incorporated in other jurisdictions is calculated at the applicable income tax
rates in the relevant countries.
(ii) The Company and certain subsidiaries are regarded as key enterprises in the industry. According to the
announcement on preferential corporate income tax policies for key enterprises, the Company and these
subsidiaries were subject to a preferential tax rate of 10% during the nine months ended 30 September
2025 and 2024. The Company and these subsidiaries were also entitled to an additional tax deductible
allowance amounting to 120% of the qualified research and development costs incurred during the nine
months ended 30 September 2025 and 2024.
(iii) Certain subsidiaries of the Group obtained the certificates of “High and New Technology Enterprise”
(“HNTE”) from the tax authorities and were subject to a preferential tax rate of 15% during the nine
months ended 30 September 2025 and 2024. These subsidiaries were also entitled to an additional tax
deductible allowance amounting to 100% of the qualified research and development costs incurred
during the nine months ended 30 September 2025 and 2024.
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-14 –


--- page 516 ---
6 EARNINGS PER SHARE
(a) Basic earnings per share
The calculation of basic earnings per share is based on the profit attributable to ordinary equity shareholders
of the Company, after adjusting for the effect of dividends entitled to holders of restricted shares issued by the
Company, and the weighted average number of the Company’s ordinary shares in issue during the respective periods,
calculated as follows:
(i) Profit attributable to ordinary equity shareholders of the Company
Nine months ended 30 September
2025 2024
RMB’000 RMB’000
(unaudited) (unaudited)
Profit attributable to ordinary equity shareholders of
the Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,083,228 832,113
(ii) Weighted average number of ordinary shares
Nine months ended 30 September
2025 2024
’000 ’000
(unaudited) (unaudited)
Issued ordinary shares at the beginning of the period /H1118/H1118/H1118/H1118/H1118/H1118664,124 666,906
Less: treasury shares at the beginning of the period
(Note 18(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,041) (3,510)
Ordinary shares outstanding at the beginning of the period /H1118/H1118/H1118 661,083 663,396
Effect of shares repurchased /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (863)
Effect of share options exercised (Note 18(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118832 –
Effect of restricted shares vested (Note 18(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118420 474
Weighted average number of ordinary shares at the end of
the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118662,335 663,007
(b) Diluted earnings per share
The calculation of diluted earnings per share is based on the profit attributable to ordinary equity shareholders
of the Company, and the weighted average number of the Company’s ordinary shares (diluted), calculated as follows:
Weighted average number of ordinary shares (diluted)
Nine months ended 30 September
2025 2024
’000 ’000
(unaudited) (unaudited)
Weighted average number of ordinary shares at the end of
the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118662,335 663,007
Effect of deemed issue of shares under the Company’s
restricted shares plan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118618 340
Effect of deemed issue of shares under the Company’s share
option plans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,010 –
Weighted average number of ordinary shares (diluted) at the
end of the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118663,963 663,347
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-15 –


--- page 517 ---
7 PROPERTY, PLANT AND EQUIPMENT
Carrying amount
RMB’000
At 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,089,489
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118416,865
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,870)
Depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(199,898)
Capitalised to development expenditure /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(38,637)
Impairment loss (Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,810)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(861)
At 30 September 2025 (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,259,278
Note:
During the nine months ended 30 September 2025, given the drop in market demand, the Group has identified
products that had under-performed against expectation, and has carried out impairment testing on the related
property, plant and equipment and intangible assets, and written down such assets to their recoverable amounts,
and the related impairment losses were recognised in profit or loss.
8 RIGHT-OF-USE ASSETS
Carrying amount
RMB’000
At 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111897,984
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111863,819
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,453)
Depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(42,695)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(273)
At 30 September 2025 (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118114,382
9 INTANGIBLE ASSETS
Carrying amount
RMB’000
At 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118604,215
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118184,819
Capitalised to development expenditure /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,637
Amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(128,393)
Impairment loss (Note 7) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,903)
At 30 September 2025 (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118697,375
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-16 –


--- page 518 ---
10 EQUITY SECURITIES DESIGNATED AT FVOCI
As at 30 September As at 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Investments in unlisted equity securities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,397,158 3,170,572
Investments in equity securities listed in Chinese Mainland /H1118/H1118 86,417 195,297
3,483,575 3,365,869
The unlisted equity securities were mainly investments in entities established in Chinese Mainland. The Group
designated these investments as financial assets measured at FVOCI (non-recycling), as the investments are held for
strategic purposes.
11 FINANCIAL ASSETS AND LIABILITIES MEASURED AT FVPL
As at 30 September As at 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Non-current assets
– Private equity funds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118224,150 210,894
Current assets
– Wealth management products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,922 120,000
– Foreign exchange forward contracts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,735 –
62,657 120,000
Current liabilities
– Foreign exchange forward contracts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,253 –
All non-current assets are investments in unlisted private equity funds established in Chinese Mainland and are
measured at FVPL.
12 INVENTORIES
As at 30 September As at 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,041,177 1,134,950
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118751,589 426,950
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,025,515 1,156,432
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,198 859
2,827,479 2,719,191
Less: write-down of inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(260,524) (372,823)
2,566,955 2,346,368
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-17 –


--- page 519 ---
The analysis of the amounts of inventories recognised as cost of sales and included in profit or loss is as
follows:
Nine months ended 30 September
2025 2024
RMB’000 RMB’000
(unaudited) (unaudited)
Carrying amount of inventories consumed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,298,026 3,560,390
Add: write-down of inventories, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(112,299) (45,565)
4,185,727 3,514,825
13 TRADE AND BILLS RECEIV ABLES
As at 30 September As at 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Trade receivables due from third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118236,169 212,601
Less: loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) (585)
236,164 212,016
Bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,322 19,775
Financial assets measured at amortised cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118246,486 231,791
Bills receivables measured at FVOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,201 –
249,687 231,791
Ageing analysis
Trade receivables (net of loss allowance), based on the invoice date, are with the following ageing analysis as
of the end of the reporting period:
As at 30 September As at 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118236,060 211,221
More than 3 months but less than 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118104 795
236,164 212,016
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-18 –


--- page 520 ---
14 PREPAYMENTS AND OTHER CURRENT ASSETS AND OTHER NON-CURRENT ASSETS
(a) Prepayments and other current assets
As at 30 September As at 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Other receivables:
– receivables from NCI arose from the acquisition of a
subsidiary (Note (i)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118156,022 171,561
– deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,568 39,124
– others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,445 5,053
197,035 215,738
Less: loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10,835) (8,086)
Financial assets measured at amortised cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118186,200 207,652
Prepayments for inventories to third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,176 24,533
Input V A T deductible /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118146,982 108,454
Current portion of other non-current assets (Note 14(b)) /H1118/H1118/H1118/H1118 313,006 250,000
Prepayments for costs incurred in connection with the
proposed initial listing of the H shares of the Company
(Note (ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,950 –
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,153 17,975
736,467 608,614
Notes:
(i) The receivable from NCI is secured by the NCI’s equity interests in Suzhou XySemi Electronic
Technology Co., Ltd. and properties owned by the NCI.
(ii) The balance at 30 September 2025 included costs related to the proposed initial listing of the H shares
of the Company on The Stock Exchange of Hong Kong Limited, and it will be transferred to share
premium within equity upon the listing of the H shares of the Company on The Stock Exchange of Hong
Kong Limited.
(b) Other non-current assets
As at 30 September As at 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Prepayments for suppliers’ production capacity (Note) /H1118/H1118/H1118/H1118/H1118/H1118313,006 563,006
Prepayments for acquisitions of property, plant and equipment
and intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118127,561 89,262
440,567 652,268
Less: current portion of other non-current assets (Note 14(a))
– prepayments for suppliers’ production capacity expected to
be settled within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(313,006) (250,000)
127,561 402,268
Note: The prepayments for suppliers’ production capacity are deposits paid to suppliers to secure these
suppliers’ production capacities for a certain period, and will be deducted by subsequent purchases of
inventories from these suppliers.
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-19 –


--- page 521 ---
15 CASH AT BANK AND ON HAND
Cash at bank and on hand comprise:
As at 30 September As at 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Cash at bank and on hand in the consolidated statement of
financial position /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,641,936 9,128,010
Less: accrued interest arising from deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(36,173) (23,851)
Cash and cash equivalent in the condensed consolidated
statements of cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,605,763 9,104,159
As at 30 September 2025, cash at bank and on hand amounted to RMB5,764,074,000 are placed at financial
institutions in Chinese Mainland (31 December 2024: RMB6,415,980,000). Remittance of funds out of the Chinese
Mainland is subject to relevant rules and regulations of foreign exchange control.
16 TRADE PAYABLES
As at 30 September As at 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Trade payables due to:
– third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118732,339 620,126
– related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111849,605 113,473
Financial liabilities measured at amortised cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118781,944 733,599
At of the end of the reporting period, the ageing analysis of trade payables, based on the invoice date, is as
follows:
As at 30 September As at 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118767,922 732,588
After 1 year but within 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,048 66
After 2 years but within 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837 7
After 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118937 938
781,944 733,599
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-20 –


--- page 522 ---
17 ACCRUALS AND OTHER PAYABLES
As at 30 September As at 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Staff cost payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118316,117 291,238
Unvested restricted shares repurchase obligation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,793 82,140
Payables for consultancy and technology fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,937 70,583
Consideration payable for an acquisition of a subsidiary /H1118/H1118/H1118/H1118 – 15,123
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,414 40,328
Financial liabilities measured at amortised cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118405,261 499,412
Other taxes and levies payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,855 23,319
427,116 522,731
18 CAPITAL, RESERVES AND DIVIDENDS
(a) Dividends
(i) Dividends payable to equity shareholders attributable to the interim period
The directors of the Company do not recommend the payment of an interim dividend for the nine months ended
30 September 2025 (nine months ended 30 September 2024: Nil).
(ii) Dividends payable to equity shareholders attributable to the previous financial year, approved and paid
during the period
Nine months ended 30 September
2025 2024
RMB’000 RMB’000
(unaudited) (unaudited)
Final dividend in respect of the previous financial year,
approved and paid during the following interim period /H1118/H1118/H1118/H1118 225,575 –
(b) Share capital
Issued share capital
Nine months ended 30 September Nine months ended 30 September
2025 2024
Number of shares Number of shares
’000 RMB’000 ’000 RMB’000
(unaudited) (unaudited) (unaudited) (unaudited)
Ordinary shares, issued and fully
paid:
At 1 January /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118664,124 664,124 666,906 666,906
Share options exercised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,248 3,248 – –
Cancellation of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(94) (94) (1,034) (1,034)
At 30 September /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118667,278 667,278 665,872 665,872
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-21 –


--- page 523 ---
(c) Treasury share reserves
Number of shares
Repurchase of
ordinary shares
Unvested
restricted shares
repurchase
obligation Total
’000 RMB’000 RMB’000 RMB’000
As at 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,041 162,708 82,140 244,848
Restricted shares vested /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,003) – (76,274) (76,274)
Share options exercised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,301) (111,340) – (111,340)
Restricted shares forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,143 (2,143) –
Cancellation of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(94) (7,601) – (7,601)
Dividends in relation to unvested
restricted shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (117) (117)
As at 30 September 2025
(unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118643 45,910 3,606 49,516
(d) Equity settled share-based transactions
No share options or restricted shares were granted under the Group’s share-based payment plans during the
nine months ended 30 September 2025 (nine months ended 30 September 2024: 6,781,400 and Nil, respectively).
The numbers of share options exercised and restricted shares vested were 4,549,476 and 1,003,449,
respectively, during nine months ended 30 September 2025 (nine months ended 30 September 2024: Nil and 813,720,
respectively).
19 FAIR V ALUE MEASUREMENT OF FINANCIAL INSTRUMENTS
(a) Financial assets and liabilities measured at fair value
Fair value hierarchy
The following tables present the fair value of the Group’s financial instruments measured at the end of
the reporting period on a recurring basis, categorised into the three-level fair value hierarchy as defined in
IFRS 13, Fair value measurement . The level into which a fair value measurement is classified is determined
with reference to the observability and significance of the inputs used in the valuation technique as follows:
 Level 1 valuations: Fair value measured using only Level 1 inputs, i.e. unadjusted quoted
prices in active markets for identical assets or liabilities at the
measurement date.
 Level 2 valuations: Fair value measured using Level 2 inputs, i.e. observable inputs which fail
to meet Level 1, and not using significant unobservable inputs.
Unobservable inputs are inputs for which market data are not available.
 Level 3 valuations: Fair value measured using significant unobservable inputs.
Fair value at
30 September
Fair value measurements as at
30 September 2025 categorised into
2025 Level 1 Level 2 Level 3
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited) (unaudited) (unaudited) (unaudited)
Equity securities designated
at FVOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,483,575 86,417 – 3,397,158
Equity securities measured
at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118224,150 – – 224,150
Wealth management products /H1118 60,922 – – 60,922
Foreign exchange forward
contracts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,735 – 1,735 –
Bills receivables measured
at FVOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,201 – 3,201 –
Foreign exchange forward
contracts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,253) – (2,253) –
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-22 –


--- page 524 ---
Fair value at
31 December
Fair value measurements as at
31 December 2024 categorised into
2024 Level 1 Level 2 Level 3
RMB’000 RMB’000 RMB’000 RMB’000
Equity securities designated
at FVOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,365,869 195,297 – 3,170,572
Equity securities measured
at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118210,894 – – 210,894
Wealth management products /H1118 120,000 – – 120,000
The Group’s policy is to recognise transfers between levels of fair value hierarchy as at the end of the
reporting period in which they occur.
The movements during the nine months ended 30 September 2025 and 2024 in the balance of the Level
3 fair value measurements of equity securities designated at FVOCI are as follows:
Nine months ended 30 September
2025 2024
RMB’000 RMB’000
(unaudited) (unaudited)
Equity securities designated at FVOCI
At 1 January /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,170,572 1,453,024
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118131,848 1,525,000
Decreases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(42,353) (739)
Net unrealised gains or losses recognised in OCI /H1118/H1118/H1118/H1118/H1118137,970 3,341
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(879) (74)
At 30 September /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,397,158 2,980,552
There were no transfers between Level 1 and Level 2, or transfers into or out of Level 3 during the nine
months ended 30 September 2025 (nine months ended 2024: Nil).
Information about Level 3 fair value measurements
Below is a summary of significant unobservable inputs to the valuation of these major financial assets
together with information about the sensitivity of the fair value measurement to changes in unobservable inputs
at 30 September 2025:
Valuation techniques
Significant
unobservable inputs
Wealth management products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Discounted cash
flow method
Interest return rate
Equity securities designated at FVOCI and equity
securities measured at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Market approach Discount for lack
of marketability
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-23 –


--- page 525 ---
With all other variables held constant, if the significant unobservable inputs applied in the valuation had
been 1% lower or higher than Group’s estimation as at 30 September 2025, the fair value of wealth
management products categorised into Level 3 would (decrease)/increase by the amounts listed in tables
below:
As at 30 September
2025
RMB’000
(unaudited)
Interest return rate decrease 1% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(609)
Interest return rate increase 1% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118609
During the nine months ended 30 September 2025, the Group’s equity securities designated at FVOCI
and measured at FVPL are investments in non-listed entities of which fair values were substantially determined
based on either the latest round of equity financing obtained by these entities or based on market approach.
Given the discount for lack of marketability was not developed by the Group, the management of the Group
did not carry out nor present any information on sensitivity analysis.
(b) Fair value of financial assets and liabilities carried at other than fair value
The carrying amounts of the Group’s financial instruments carried at amortised cost are not materially different
from their fair values as at 30 September 2025 and 31 December 2024.
20 COMMITMENTS
Commitments outstanding at the end of the reporting period not provided for in the interim financial
information were as follows:
As at 30 September As at 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Contracted for capital injections into equity securities
measured at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118500,400 635,400
The Group has entered into various investment agreements to invest in certain private equity funds in future
periods.
21 RELATED PARTY TRANSACTIONS
(a) Related parties and their relationships with the Group
Name of related parties
Relationship with
the Group
Deep Simplicity Technology Co., Ltd. (ʮ̡)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118An associate
Hefei Reliance Memory Limited (ʮ̡)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118An associate
Transcputing Tech Co., Ltd. (ʮ̡)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118An associate
CXMT Corporation (ʮ̡)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Note i
CXMT Memory Technologies, Inc. (ʮ̡)* and its subsidiaries /H1118/H1118/H1118Note i
Mr. Zhang Kedong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Note ii
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-24 –


--- page 526 ---
Notes:
i. During the nine months ended 30 September 2025, Mr. Zhu Yiming, the Chairman of the Company,
currently serves as the Chairman of CXMT Corporation, the parent company of CXMT Memory
Technologies, Inc..
ii. Mr. Zhang Kedong, a former independent director of the Company, resigned on 16 December 2024.
* These entities’ official names are in Chinese. The English translations of these entities’ names are for
identification only.
(b) Transactions with related parties
The Group entered into the following related party transactions:
Nine months ended 30 September
2025 2024
RMB’000 RMB’000
(unaudited) (unaudited)
Sales of goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118226 15,947
Purchases of materials and services /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118710,434 773,852
(c) Balances with related parties
As at 30 September As at 31 December
2025 2024
RMB’000 RMB’000
(unaudited)
Trade in nature:
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111849,605 113,473
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,213 1,371
Accruals and other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134 –
22 NON-ADJUSTING EVENTS AFTER THE REPORTING PERIOD
There were no material subsequent events after 30 September 2025 and up to date of this report.
APPENDIX IA UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
– IA-25 –


--- page 527 ---
The following information set forth in this Appendix does not form part of the
Accountants’ Report received from the Company’ s reporting accountants, KPMG, Certified
Public Accountants, Hong Kong, as set out in Appendix I to this prospectus, and is included
herein for illustrative purposes only.
The unaudited pro forma financial information should be read in conjunction with the
section headed “Financial information” in this prospectus and the Accountants’ Report set out
in Appendix I to this prospectus.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE
ASSETS
The following unaudited pro forma statement of adjusted net tangible assets of the Group
is prepared in accordance with Rule 4.29 of the Listing Rules and is set out below to illustrate
the effect of the Global Offering on the consolidated net tangible assets attributable to equity
shareholders of the Company as of 30 June 2025 as if the Global Offering had taken place on
30 June 2025.
The unaudited pro forma statement of adjusted net tangible assets has been prepared for
illustrative purposes only and because of its hypothetical nature, it may not give a true picture
of the financial position of the Group had the Global Offering been completed as of 30 June
2025 or at any future date.
Consolidated net
tangible assets
attributable
to equity
shareholders of
the Company
as of
30 June 2025
Estimated net
proceeds from
the Global
Offering
Unaudited
pro forma
adjusted net
tangible assets
attributable
to equity
shareholders of
the Company
Unaudited pro forma
adjusted net tangible
assets per Share
RMB’000 RMB’000 RMB’000 RMB HK$
Note (1) Note (2) Note (3) Note (4)
Based on an Offer Price of
HK$132.00 per H Share /H1118/H1118/H1118 15,990,988 3,402,166 19,393,154 28.02 30.89
Based on an Offer Price of
HK$162.00 per H Share /H1118/H1118/H1118 15,990,988 4,182,595 20,173,583 29.15 32.14
Notes:
(1) The consolidated net tangible assets attributable to equity shareholders of the Company as of 30 June 2025 is
arrived at after (i) deducting goodwill of RMB617,185,000 and intangible assets of RMB654,598,000; and (ii)
adjusting the share of intangible assets attributable to non-controlling interests of RMB22,873,000 from the
consolidated total equity attributable to equity shareholders of the Company of RMB17,239,898,000 as of
30 June 2025, which is extracted from the Accountants’ Report as set out in Appendix I in this prospectus.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


--- page 528 ---
(2) The estimated net proceeds from the Global Offering are based on the expected issuance of 28,915,800 H
Shares and the indicative offer prices of HK$132.00 per H Share (being the minimum Offer Price) and
HK$162.00 per H Share (being the maximum Offer Price), after deduction of the estimated underwriting fees
and other estimated expenses related to the Global offering paid or payable by the Group (excluding the listing
expenses charged to profit or loss during the Track Record Period), and do not take into account any H Shares
which may be issued upon the exercise of the Offer Size Adjustment Option and the Over-allotment Option
and any Shares that may be issued under the Share Incentive Plans.
For illustrative purpose, the estimated net proceeds of the Global Offering have been converted into RMB at
an exchange rate of HK$1 to RMB0.90699. No representation is made that HK$ amounts have been, could
have been or may be converted into RMB, or vice versa, at that rate or at any other rate.
(3) The unaudited pro forma adjusted net tangible assets per Share is arrived at after adjustments referred to in
the preceding paragraphs and on the basis that 692,028,799 Shares (being 664,059,190 Shares in issue as at
30 June 2025, deducting repurchased ordinary shares held by the Company and unvested restricted shares
under the 2021 Restricted Share Incentive Plan as at 30 June 2025 of 946,191 shares and adding 28,915,800
H Shares to be issued pursuant to the Global Offering), were in issue immediately following the completion
of the Global Offering, and does not take into account any H shares which may be issued upon the exercise
of the Offer Size Adjustment Option and the Over-allotment Option and any Shares that may be issued under
the Share Incentive Plans.
(4) The unaudited pro forma adjusted net tangible assets per Share is converted to HK$ with an exchange rate of
RMB1 to HK$1.10255. No representation is made that RMB amounts have been, could have been or may be
converted to HK$, or vice versa, at that rate or at any other rate.
(5) No adjustment has been made to reflect any trading results or other transactions of the Group entered into
subsequent to 30 June 2025.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


--- page 529 ---
B. REPORT ON THE UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following is the text of a report received from the reporting accountants, KPMG,
Certified Public Accountants, Hong Kong, in respect of the Group’ s pro forma financial
information for the purpose in this prospectus.
INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF PRO FORMA FINANCIAL INFORMATION
TO THE DIRECTORS OF GIGADEVICE SEMICONDUCTOR INC.
We have completed our assurance engagement to report on the compilation of pro forma
financial information of GigaDevice Semiconductor Inc. (the “Company”) and its subsidiaries
(collectively the “Group”) by the directors of the Company (the “Directors”) for illustrative
purposes only. The unaudited pro forma financial information consists of the unaudited pro
forma statement of adjusted net tangible assets as at 30 June 2025 and related notes as set out
in Part A of Appendix II to the prospectus dated 31 December 2025 (the “Prospectus”) issued
by the Company. The applicable criteria on the basis of which the Directors have compiled the
pro forma financial information are described in Part A of Appendix II to the Prospectus.
The pro forma financial information has been compiled by the Directors to illustrate the
impact of the proposed offering of the H shares of the Company (the “Global Offering”) on the
Group’s financial position as at 30 June 2025 as if the Global Offering had taken place at
30 June 2025. As part of this process, information about the Group’s financial position as at
30 June 2025 has been extracted by the Directors from the Group’s historical financial
information included in the Accountants’ Report as set out in Appendix I to the Prospectus.
Directors’ Responsibilities for the Pro Forma Financial Information
The Directors are responsible for compiling the pro forma financial information in
accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to Accounting
Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment
Circulars” (“AG 7”) issued by the Hong Kong Institute of Certified Public Accountants
(“HKICPA”).
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-3 –


--- page 530 ---
Our Independence and Quality Management
We have complied with the independence and other ethical requirements of the Code of
Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality and
professional behaviour.
Our firm applies Hong Kong Standard on Quality Management 1 “Quality Management
for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or
Related Services Engagements”, which requires the firm to design, implement and operate a
system of quality management including policies or procedures regarding compliance with
ethical requirements, professional standards and applicable legal and regulatory requirements.
Reporting Accountants’ Responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the
Listing Rules, on the pro forma financial information and to report our opinion to you. We do
not accept any responsibility for any reports previously given by us on any financial
information used in the compilation of the pro forma financial information beyond that owed
to those to whom those reports were addressed by us at the dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements (“HKSAE”) 3420 “Assurance Engagements to Report on the Compilation of Pro
Forma Financial Information Included in a Prospectus” issued by the HKICPA. This standard
requires that the reporting accountants plan and perform procedures to obtain reasonable
assurance about whether the Directors have compiled the pro forma financial information in
accordance with paragraph 4.29 of the Listing Rules, and with reference to AG 7 issued by the
HKICPA.
For purpose of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical financial information used in compiling the pro forma
financial information, nor have we, in the course of this engagement, performed an audit or
review of the financial information used in compiling the pro forma financial information.
The purpose of pro forma financial information included in an investment circular is
solely to illustrate the impact of a significant event or transaction on unadjusted financial
information of the Group as if the event had occurred or the transaction had been undertaken
at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any
assurance that the actual outcome of events or transactions as at 30 June 2025 would have been
as presented.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-4 –


--- page 531 ---
A reasonable assurance engagement to report on whether the pro forma financial
information has been properly compiled on the basis of the applicable criteria involves
performing procedures to assess whether the applicable criteria used by the Directors in the
compilation of the pro forma financial information provide a reasonable basis for presenting
the significant effects directly attributable to the event or transaction, and to obtain sufficient
appropriate evidence about whether:
 the related pro forma adjustments give appropriate effect to those criteria; and
 the pro forma financial information reflects the proper application of those
adjustments to the unadjusted financial information.
The procedures selected depend on the reporting accountants’ judgement, having regard
to the reporting accountants’ understanding of the nature of the Group, the event or transaction
in respect of which the pro forma financial information has been compiled, and other relevant
engagement circumstances.
The engagement also involves evaluating the overall presentation of the pro forma
financial information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Our procedures on the pro forma financial information have not been carried out in
accordance with attestation standards or other standards and practices generally accepted in the
United States of America, auditing standards of the Public Company Accounting Oversight
Board (United States) or any overseas standards and accordingly should not be relied upon as
if they had been carried out in accordance with those standards and practices.
We make no comments regarding the reasonableness of the amount of net proceeds from
the issuance of the Company’s H shares, the application of those net proceeds, or whether such
use will actually take place as described in the section headed “Future Plans and Use of
Proceeds” in the Prospectus.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-5 –


--- page 532 ---
Opinion
In our opinion:
(a) the pro forma financial information has been properly compiled on the basis stated;
(b) such basis is consistent with the accounting policies of the Group, and
(c) the adjustments are appropriate for the purposes of the pro forma financial
information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
KPMG
Certified Public Accountants
Hong Kong
31 December 2025
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-6 –


--- page 533 ---
The primary purpose of this Appendix is to provide potential investors with an overview
of the Company’s articles of association. As the information contained in this section is only
a summary, it may not contain all the information that is important to potential investors.
GENERAL PROVISIONS
The Company is a joint stock limited company of perpetual duration.
All of the capital of the Company shall be divided into shares of equal value. The
shareholders shall be liable to the extent of the shares subscribed and the Company shall be
liable for its debts to the extent of all of its assets.
The Articles of Association shall be a legally binding document that regulates the
Company’s organization and activities, the rights and obligations between the Company and its
shareholders as well as among the shareholders, and a legally binding document for the
Company, shareholders, directors and senior management members from the date on which it
takes effect. Pursuant to the Articles of Association, shareholders may take legal action against
other shareholders, directors, general manager, other senior management members of the
Company and the Company, and the Company may take legal action against its shareholders,
directors, general manager and other senior management members.
BUSINESS SCOPE
The business scope of the Company includes: research and development of
microelectronic products, computer hardware and software, computer systems integration,
telecommunications equipment, handheld mobile terminals; commissioned processing and
production, sales of self-developed products; technology transfer, technical services; import
and export of commodities and technology and acting as import and export agency. (The
market entity shall select business items and carry out operating activities at its own discretion
in accordance with the laws; items subject to approval in accordance with the laws, operating
activities can only be conducted upon approval by relevant authorities and to the extent
authorized by such approval; it is not allowed to engage in operating activities prohibited or
restricted by industrial policies of the State and the municipality.)
SHARES
Issuance of Shares
The shares of the Company shall take the form of registered shares. The issuance of the
shares of the Company shall be conducted in the principle of openness, fairness and
impartiality, and each share of the same class is entitled to equal rights. For shares of the same
class issued at the same time, the issuance conditions and price per share shall be identical; and
the price paid by the subscribers for each share is the same.
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-1 –


--- page 534 ---
Increase, Decrease and Repurchase of Shares
The Company may, based on its operating and development needs and in accordance with
the laws and regulations and the resolution of any general meeting, increase its capital by the
following methods:
(i) an issue of shares to unspecified persons;
(ii) an issue of shares to specified persons;
(iii) offering of bonus shares to existing shareholders;
(iv) the conversion of provident funds into share capital;
(v) any other methods stipulated by laws and administrative regulations and approved
by the CSRC and the securities regulatory authorities in the place where the shares
of the Company are listed.
The Company may reduce its registered capital. The reduction of registered capital of the
Company shall be made in accordance with the Company Law, other relevant regulations as
well as procedures stipulated in the Articles of Association.
The Company shall not repurchase its own shares, except under any of the following
circumstances:
(i) to reduce the registered capital of the Company;
(ii) to merge with other companies holding the Company’s shares;
(iii) to use the shares for the employee share schemes or as equity incentives;
(iv) to acquire the shares of shareholders (upon their request) who vote against any
resolution adopted at general meetings on the merger or division of the Company;
(v) to utilize shares to satisfy the conversion of corporate bonds that are convertible into
shares issued by the Company;
(vi) to safeguard corporate values and shareholders’ equity as the Company deems
necessary.
Where the Company repurchases its shares, it shall be conducted through public and
centralized trading or other methods recognized by laws, administrative regulations, the CSRC
and the securities regulatory authorities in the place where the shares of the Company are
listed.
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-2 –


--- page 535 ---
Where the Company intends to repurchase its shares under the circumstances set out in
(iii), (v) or (vi) above, the repurchase shall be conducted through public and centralized
trading.
If the Company intends to repurchase its shares for reasons set out in (i) and (ii) above,
it shall be approved by a resolution at a general meeting. If the Company intends to repurchase
its shares for reasons set out in (iii), (v) and (vi) above, a board resolution shall be passed by
more than two-thirds of the directors attending the board meeting.
After the Company has repurchased its shares in accordance with the provisions above,
the shares repurchased under the circumstance set out in (i) above shall be canceled within 10
days from the date of repurchase, the shares repurchased under the circumstances set out in (ii)
and (iv) above shall be transferred or canceled within six months, and for the shares
repurchased under the circumstances set out in (iii), (v) and (vi) above, the total number of the
Company’s shares held by the Company shall not exceed 10% of the total issued shares of the
Company, and the shares so acquired shall be transferred or canceled within three years. Where
it is otherwise provided in the laws, regulations and the securities regulatory rules of the place
where the shares of the Company are listed in respect of matters relating to share repurchases,
such provisions shall prevail.
SHARE TRANSFER
The shares of the Company shall be transferred according to law. The Company shall not
accept any of its own shares as the subject of pledge.
The shares issued prior to the public issuance of shares by the Company shall not be
transferred within one year of the date on which the shares of the Company are listed and
traded on a stock exchange.
The directors and senior management members of the Company shall report to the
Company their shareholdings in the Company and changes therein. During their terms of office
as determined upon appointment, directors and senior management members of the Company
shall not transfer annually during their terms of office more than 25% of the total number of
shares of the Company which they hold; the shares of the Company held by them shall not be
transferred within one (1) year from the date on which the shares of the Company are listed and
traded. The aforesaid persons shall not transfer the shares of the Company held by them within
six months from the date of their departure from the Company.
When any shareholder, holding more than 5% of the Company’s shares, of the Company
or any director, senior management of the Company disposes of his/her/its shares or other
securities with an equity nature in the Company within six months of purchase, or purchases
shares in the Company again within six months after disposal, the proceeds derived therefrom
shall be retained for the benefit of the Company and be revoked by the Board of Directors of
the Company. However, the disposals by brokerage companies holding more than 5% of the
shares in the Company due to the fact that their underwritten shares remain unsubscribed and
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-3 –


--- page 536 ---
other circumstances stipulated by the CSRC shall not be subject to the restriction. Where it is
otherwise provided in the laws, regulations and the securities regulatory rules of the place
where the shares of the Company are listed, such provisions shall prevail.
The shares or other securities with an equity nature held by any director, senior
management and natural person shareholder referred to in the preceding paragraph shall
include the shares or other securities with an equity nature held by their spouses, parents and
children, and those held through others’ accounts.
If the Board of Directors of the Company fails to comply with the aforesaid provisions,
the shareholders shall have the rights to request the Board of Directors to implement the related
provisions within 30 days. If the Board of Directors of the Company fails to implement the
requirements within the specified time, the shareholders may directly institute a lawsuit in the
People’s Court in their own name for the benefit of the Company. If the Board of Directors of
the Company fails to act in accordance with the aforesaid provisions, the responsible directors
shall be jointly and severally liable in accordance with the law.
SHAREHOLDERS AND GENERAL MEETING
General Provisions on Shareholders
The Company shall establish a register of shareholders in accordance with the certificates
issued by the share registrar and clearing house. The register of members shall be sufficient
evidence of the holding of shares in the Company by the shareholders. Shareholders shall enjoy
rights and assume obligations in accordance with the category of shares they hold; shareholders
holding the same category of shares shall enjoy equal rights and assume equal obligations.
When the Company convenes a general meeting, distributes dividends, commences
liquidation or engages in other acts requiring the confirmation of shareholding, the Board of
Directors or the convener of a general meeting shall decide the date of record. The shareholders
whose names appear on the register of members at the close of trading on the date of record
are entitled to the relevant rights of shareholders.
The shareholders of the Company shall be entitled to the following rights:
(i) to be entitled to dividends and other forms of distribution in proportion to the
number of shares held;
(ii) the right to propose, hold, convene and preside over, to attend or appoint a proxy to
attend general meetings and to speak and exercise the corresponding voting rights
in accordance with the laws;
(iii) to supervise and manage the business activities of the Company and to put forward
proposals or raise inquiries;
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-4 –


--- page 537 ---
(iv) to transfer, donate, or pledge shares held by them in accordance with the laws,
administrative regulations and provisions of the Articles of Association;
(v) to review and copy the Articles of Association, the register of members, minutes of
general meeting, resolutions of the Board of Directors and financial and accounting
reports, and to review the Company’s accounting books and accounting documents
(for shareholders who meet the requirements);
(vi) upon termination or liquidation of the Company, to participate in the distribution of
the remaining assets of the Company in accordance with the number of shares held;
(vii) with respect to shareholders who vote against any resolution adopted at the general
meeting on the merger or division of the Company, to require the Company to
acquire the shares held by them;
(viii) other rights conferred by laws, administrative regulations, departmental rules, the
securities regulatory rules of the place where the shares of the Company are listed
or the Articles of Association.
If any resolution of the general meeting or the Board of Directors violates the laws or
administrative regulations, the shareholders shall have the right to submit to the People’s Court
to nullify such resolution. If the convening procedures or voting methods for the general
meeting or the board meeting violate the laws, administrative regulations or the Articles of
Association, or any content of the resolution thereof violates the Articles of Association, the
shareholders shall have the right to submit to the People’s Court within 60 days after such a
resolution is made to revoke it. However, this does not apply if such procedures for convening
the general meeting and the board meeting, or the voting thereat, have only minor flaws that
have no substantial impact on the resolution.
Where the directors and senior management personnel (other than members of the Audit
Committee) violate laws, administrative regulations or the provisions in the Articles of
Association in time of performing their duty hereof and has caused damage to the Company,
the shareholder who holds more than one percent of the shares separately or aggregately in a
continuous 180 days can submit a written request to the Audit Committee to institute litigation
at a People’s Court. Where members of the Audit Committee violate laws, administrative
regulations or the provisions in the Articles of Association in time of performing their duty
hereof and has caused damage to the Company, the aforementioned shareholders can submit a
written request to the Board of Directors to institute litigation at a People’s Court.
On the conditions that the Audit Committee or the Board of Directors refuse to prosecute
an action after receiving the written request in the former Article, or do not take an action
within 30 days, or if urgent situation, without an immediate proceedings the Company interests
will be irreparably damaged, the shareholders in the former Article shall have the right to sue
to the People’s Court in their own name.
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-5 –


--- page 538 ---
Where others infringe the Company’s legitimate rights and interests and have caused
damages to the Company, the shareholder who holds more than one percent of the shares
separately or aggregately in a continuous 180 days can sue to the People’s Court in accordance
with the aforesaid provisions.
Shareholders of the Company shall assume the following obligations:
(i) Complying with the laws, administrative regulations, the securities regulatory rules
of the place where the shares of the Company are listed and the Articles of
Association;
(ii) Paying subscription moneys for the shares subscribed in accordance with the agreed
manner of payment;
(iii) No withdrawal of their share capital contribution except for the circumstances set
out in the laws, administrative regulations and the securities regulatory rules of the
place where the shares of the Company are listed;
(iv) No abuse of shareholder’s rights to damage the interests of the Company or other
shareholders; no abuse of the independent legal person status of the Company and
the limited liability of shareholders to damage the interests of the creditors of the
Company;
(v) Other obligations that should be assumed under laws, administrative regulations, the
securities regulatory rules of the place where the shares of the Company are listed
and the Articles of Association.
If any shareholder of the Company abuses the shareholder’s rights and causes loss to the
Company or other shareholders, he/she shall be liable for the compensation. If any shareholder
of the Company abuses the independent legal person status of the Company and the limited
liability of shareholders to evade debts and severely damage the interests of the creditors of the
Company, he/she shall bear joint liability for the debts of the Company.
Controlling Shareholders and De facto Controllers
The controlling shareholders and de facto controllers of the Company shall exercise their
rights and fulfil their obligations in accordance with the laws, administrative regulations, the
securities regulatory rules of the place where the shares of the Company are listed, the
provisions of the CSRC and the stock exchange, and safeguard the interests of the listed
company.
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-6 –


--- page 539 ---
Controlling shareholders and de facto controllers of the Company shall comply with the
following provisions:
(i) to exercise their rights as shareholders in accordance with the law and not abuse
their control or use their affiliation to prejudice the legitimate interests of the
Company or other shareholders;
(ii) to strictly fulfil the public statements and undertakings made, without unilateral
alteration or waiver;
(iii) to fulfil information disclosure obligations in strict accordance with the relevant
regulations, to proactively cooperate with the Company in information disclosure
and to inform the Company in a timely manner of material events that have occurred
or are proposed to occur;
(iv) not to appropriate the Company’s funds in any way;
(v) not to order, instruct or request the Company and relevant personnel to provide
guarantees in violation of laws and regulations;
(vi) not to make use of the Company’s undisclosed material information for personal
gain, not to disclose in any way undisclosed material information relating to the
Company, and not to engage in insider trading, short-swing trading, market
manipulation and other illegal and unlawful acts;
(vii) not to prejudice the legitimate rights and interests of the Company and other
shareholders through unfair related-party transactions, profit distribution, asset
restructuring, foreign investment or any other means;
(viii) to ensure the integrity of the Company’s assets, and the independence of personnel,
finance, organisation and business, and not to affect the independence of the
Company in any way;
(ix) other provisions of laws, administrative regulations, provisions of the CSRC, the
securities regulatory rules of the place where the shares of the Company are listed
and the Articles of Association.
Where a controlling shareholder or de facto controller of the Company does not act as a
director of the Company but actually carries out the affairs of the Company, the provisions of
the Articles of Association relating to the duties of loyalty and diligence of directors shall
apply. Where a controlling shareholder or de facto controller of the Company instructs a
director or a member of the senior management to engage in an act that is detrimental to the
interests of the Company or the shareholders, he/she shall be jointly and severally liable with
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-7 –


--- page 540 ---
such director or member of the senior management. If controlling shareholders or de facto
controllers pledge the shares of the Company held by them or under their effective control, they
should maintain the stability of the Company’s control and production and operation.
If controlling shareholders or de facto controllers transfer the shares of the Company held
by them, they shall comply with the restrictive provisions on the transfer of shares set out in
the laws, administrative regulations, the securities regulatory rules of the place where the
shares of the Company are listed, the regulations of the CSRC and the stock exchanges and
their undertakings in relation to the restriction on the transfer of shares.
General Provisions of General Meeting
The general meeting of the Company comprises all shareholders. The general meeting
shall be the organ of authority of the Company and shall exercise the following functions and
powers in accordance with the law (such powers shall not be delegated to the Board of
Directors or to any other body or person):
(i) to elect and replace directors and to decide on matters relating to the remuneration
of directors;
(ii) to consider and approve reports of the Board of Directors;
(iii) to consider and approve the profit distribution plans and loss recovery plans of the
Company;
(iv) to resolve on the increase or reduction of the registered capital of the Company;
(v) to resolve on the issuance of bonds by the Company;
(vi) to resolve on the merger, demerger, dissolution, liquidation or change of form of the
Company;
(vii) to amend the Articles of Association;
(viii) to resolve on the appointment, dismissal of the accounting firm engaged in the audit
work of the Company and to determine its remuneration;
(ix) to review and approve the guarantee matters as stipulated in the Articles of
Association;
(x) to consider acquisitions and disposals of material assets in a year exceeding 30% of
the Company’s latest total audited assets;
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-8 –


--- page 541 ---
(xi) to consider the related parties transactions between the Company and the related
party, in amount of more than RMB30 million, occupying more than 5% of the
audited absolute value on net asset of the Company in the latest period;
(xii) when a transaction of the Company (excluding financial assistance, and provision of
guarantee and other transactions of the Company without involving any payment of
consideration or attaching any obligations such as receiving monetary assets as gift
and waiver of debts) meets one of the following criteria (if the data involved in the
below index calculation is negative, the absolute value of the data shall be taken),
it shall be submitted to the general meeting for consideration:
a) the total amount of assets involved in the transaction (if the assets involved
have both book value and valuation, whichever is higher) accounts for over
50% of the latest audited total assets of the listed company;
b) the net assets involved in the subject matter (such as equity) of the transaction
(if the assets involved have both book value and valuation, whichever is
higher) accounts for over 50% of the latest audited net assets of the company,
and the absolute amount exceeds RMB50 million;
c) the transaction value (including liabilities and expenses incurred) accounts for
over 50% of the latest audited net assets of the Company, and the absolute
amount exceeds RMB50 million;
d) the profit derived from the transaction accounts for over 50% of the audited net
profit of the Company in the latest accounting year, and the absolute amount
exceeds RMB5 million;
e) the relevant operating income of the subject matter (such as equity) of the
transaction in the latest accounting year accounts for over 50% of audited
operating income of the listed company in the latest accounting year, and the
absolute amount exceeds RMB50 million;
f) the relevant net profit of the subject matter (such as equity) of the transaction
in the latest accounting year accounts for over 50% of the audited net profit of
the Company in the latest accounting year, and the absolute amount exceeds
RMB5 million.
(xiii) to consider the equity incentive plan and employee share schemes of the Company;
(xiv) to consider and approve proposals for changing the purpose of the raised funds;
(xv) to consider other matters that laws, administrative regulations, departmental rules,
the securities regulatory rules of the place where the shares of the Company are
listed or the Articles of Association require to be resolved by the general meeting.
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-9 –


--- page 542 ---
The general meeting could authorize the Board of Directors to make resolutions on the
issuance of corporate bonds.
General meetings are divided into annual general meetings and extraordinary general
meetings. The annual general meeting shall be convened once every year and shall take place
within six months of the end of the previous accounting year.
The Company shall convene an extraordinary general meeting within two months after the
occurrence of any one of the following circumstances:
(i) where the number of directors is less than the number stipulated in the Company
Law or is not more than two-thirds of the number required by the Articles of
Association;
(ii) where the unrecovered losses of the Company amount to one-third of its total paid-in
share capital;
(iii) upon the requisition of shareholders individually or in aggregate holding more than
10 per cent of the shares of the Company;
(iv) when the Board of Directors deems necessary;
(v) the Audit Committee proposes to call for such a meeting;
(vi) other circumstances as stipulated by laws, administrative regulations, departmental
rules, the securities regulatory rules of the place where the shares of the Company
are listed or the Articles of Association.
The general meetings shall be held at a meeting place in the form of on-site meeting
which members can attend virtually with the use of technology. The Company shall also
provide the electronic voting means for the convenience of shareholders.
Convening of General Meetings
The Board of Directors shall convene a general meeting on time and within the prescribed
period.
With the approval of a majority of all independent directors, the independent directors
shall be entitled to propose the convention of an extraordinary general meeting to the Board
of Directors. With regard to the proposal by the independent directors on convention of an
extraordinary general meeting, the Board of Directors shall, in accordance with the provisions
of the laws, administrative regulations and the Articles of Association, make feedback in
written form concerning approval or disapproval of the convention within 10 days after its
receipt of the request. If the Board of Directors agrees to hold an extraordinary general
meeting, it will issue a notice calling such meeting within 5 days after it has so resolved. If the
Board of Directors does not agree to hold the extraordinary general meeting, it shall give the
reasons and publish an announcement.
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-10 –


--- page 543 ---
The Audit Committee shall have the right to propose to the Board of Directors in writing
to hold an extraordinary general meeting. The Board of Directors shall, in accordance with the
laws, administrative regulations and the Articles of Association, give a written response on
whether or not it agrees to call such an extraordinary general meeting within 10 days after
receiving the proposal from the Audit Committee to call such meeting. If the Board of
Directors agrees to hold an extraordinary general meeting, it will issue a notice calling such
meeting within 5 days after it has so resolved. The consent of the Audit Committee shall be
secured if any change is to be made in the notice to the original request. If the Board of
Directors disagrees to hold an extraordinary general meeting or fails to give a written response
within 10 days after the receipt of the proposal, it shall be deemed that the Board of Directors
is unable or fails to perform its duty of convening a general meeting. In such case, the Audit
Committee may convene and preside over the meeting on its own.
Shareholders that hold, individually or collectively, more than 10% of the shares in the
Company shall request in writing the Board of Directors to hold an extraordinary general
meeting. The Board of Directors shall, in accordance with the laws, administrative regulations
and the Articles of Association, give a written response on whether or not it agrees to call such
an extraordinary general meeting within 10 days after receiving the request. If the Board of
Directors agrees to hold an extraordinary general meeting, it will issue a notice calling such
meeting within 5 days after it has so resolved. The consent of the relevant shareholders shall
be secured if any change is to be made in the notice to the original request. If the Board of
Directors disagrees to hold an extraordinary general meeting or fails to give a response within
10 days after receipt of the proposal, the shareholders that hold, individually or collectively,
more than 10% of the shares of the Company may propose in writing to the Audit Committee
to hold an extraordinary general meeting.
If the Audit Committee agrees to hold an extraordinary general meeting, it will issue a
notice calling such meeting within 5 days after receipt of the request. The consent of the
relevant shareholders shall be secured if any change is to be made in the notice to the original
request. If the Audit Committee fails to issue the notice calling such meeting within the period
specified, it shall be deemed to have failed to convene and preside over such meeting. The
shareholders holding, individually or collectively, more than 10% of the shares in the Company
for 90 days or more consecutively may convene and preside over such meeting.
The Audit Committee or the shareholders that decide to hold a general meeting by itself
or themselves shall notify the Board of Directors thereof in writing, and file it with the
Shanghai Stock Exchange. Upon issuing the notice of the general meeting and the resolutions
of such meeting, the Audit Committee or the convening shareholder shall provide relevant
supporting documents to the Shanghai Stock Exchange. The shareholders who convene the
general meeting shall hold at least 10% of the shares in the Company prior to the publish of
the resolutions of such meeting.
The necessary expenses of the general meeting convened by the Audit Committee or the
shareholders itself/themselves shall be borne by the Company.
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-11 –


--- page 544 ---
Resolutions and Notices of General Meeting
When convening a general meeting, the Board of Directors, the Audit Committee and
shareholders individually or in aggregate holding more than 1 per cent of the Company’s shares
shall be entitled to propose motions to the Company. Shareholders individually or in aggregate
holding more than 1% of the Company’s shares are entitled to propose interim proposals and
submit them in writing to the convener 10 days before the general meeting is to be held. The
convener shall within two days upon receipt of the proposal issue a supplementary notice of
the general meeting, announcing the content of the interim proposals and submitting the
interim proposals to the general meeting for consideration, however, except for the interim
proposals that violate the requirements of the laws, administrative regulations, the securities
regulatory rules of the place where the shares of the Company are listed or the Articles of
Association, or are not within the terms of reference of the general meeting. Save as provided
in the preceding clause, after the issue of the notice of the general meeting, the convener shall
not make any amendment to the proposal specified in the notice of the general meeting or add
any new proposal. In respect of proposal not specified in the notice of the general meeting or
not complying with the requirements of the Articles of Association, no voting and resolution
shall be made at the general meeting.
The convener shall notify shareholders by way of announcement 20 days before the
convening of an annual general meeting, and shareholders will be notified by notice 15 days
before the convening of an extraordinary general meeting.
The notice of the general meeting includes the following:
(i) the time, place and duration of the meeting;
(ii) the matters and proposals submitted to the meeting for consideration;
(iii) the date of registration of shares of shareholders entitled to attend the general
meeting;
(iv) state in plain language that all shareholders listed in the register of members as at
the date of record are entitled to attend the general meeting and may appoint a proxy
in writing to attend and vote at the meeting, and that such proxy needs not be a
shareholder of the Company;
(v) the time and place for the delivery of the proxy forms for voting;
(vi) the name and phone number of the permanent contact person for the meeting;
(vii) the time and procedures of voting via the internet or by other means;
(viii) other contents to be included in the notice as stipulated in relevant laws, regulations,
rules, normative documents, the securities regulatory rules of the place where the
shares of the Company are listed and the Articles of Association.
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-12 –


--- page 545 ---
After issuance of the notice for general meeting, the general meeting shall not be
postponed or cancelled without proper reasons and the proposals specified in the notice shall
not be withdrawn. In case of postponement or cancellation, the convener shall make an
announcement stating the reasons at least 2 business days before the original meeting date.
Holding of General Meeting
All shareholders registered on the date of share registration or their proxies are entitled
to attend the general meetings. They shall also exercise their rights to speak and vote in
accordance with the relevant laws, regulations, the securities regulatory rules of the place
where the Company’s shares are listed and the Articles of Association, unless individual
shareholders are required by the securities regulatory rules of the place where the Company’s
shares are listed to waive their voting rights in respect of individual matters. Shareholders may
attend the general meetings in person or appoint one or more persons (such persons need not
be shareholders) as proxies to attend, speak and vote on their behalf.
Where any directors and senior management are required to attend the general meeting,
such directors and senior management shall be present at the meeting and reply the enquiries
of shareholders.
The chairman of the Board of Directors shall preside over the general meeting. If the
chairman is unable to perform his or her duties or fails to perform his or her duties, the vice
chairman shall preside over the meeting; if the vice chairman is unable to perform his or her
duties or fails to perform his or her duties, more than half of directors shall jointly elect one
director to preside over the meeting. The chairperson of the Audit Committee shall preside over
the general meeting convened by the Audit Committee. If the chairperson of the Audit
Committee cannot or does not fulfill his or her duties, a member of the Audit Committee jointly
elected by more than half of the members of the Audit Committee shall preside over the
meeting. A general meeting convened by the shareholders themselves shall be presided over by
the convener or a representative elected by the convener. At a general meeting, where the
chairperson of the meeting breaches the Rules of Procedures for the General Meeting, which
makes the general meeting unable to carry on, one person may be elected as the chairperson
of the meeting by the attending shareholders with one half or more of voting rights to resume
the general meeting.
The Company shall formulate the Rules of Procedures for the General Meeting, and
specify the convening, holding and voting procedures of the General Meeting, including notice,
registration, consideration of proposal, voting, counting of votes, announcement of voting
results, formation of resolutions of the meeting, minutes of the meeting and signing thereof,
announcement as well as the principle of authorization of the general meeting to the Board of
Directors. The content of authorization shall be clear and specific. The Rules of Procedures for
the General Meeting shall be annexed to the Articles of Association and shall be prepared by
the Board of Directors and approved by the general meeting.
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-13 –


--- page 546 ---
Voting and Resolutions of General Meeting
The resolutions of the general meeting shall be divided into ordinary resolutions and
special resolutions. An ordinary resolution shall be adopted by more than half of the votes held
by the shareholders attending the general meeting. A special resolution shall be adopted by a
two-thirds or more of the votes held by the shareholders attending the general meeting.
The following matters shall be passed through ordinary resolutions at the general
meeting:
(i) work reports of the Board of Directors;
(ii) plans for profit distribution and recovery of losses prepared by the Board of
Directors;
(iii) appointment and dismissal of the members of the Board of the Directors, and their
remuneration and payment methods;
(iv) matters other than those which shall be passed by special resolutions as specified by
laws, administrative regulations, the securities regulatory rules of the place where
the shares of the Company are listed, or the Articles of Association.
The following matters shall be passed through special resolution at the general meeting:
(i) the increase or reduction of the registered capital of the Company;
(ii) the division, spin-off, merger, dissolution and liquidation (including voluntary
liquidation) of the Company;
(iii) the amendment to the Articles of Association;
(iv) the purchases or sales of material assets by the Company within one year or the
guarantee amount provided to others exceeding 30% of the latest audited total assets
of the Company;
(v) the equity incentive plan;
(vi) adjustments or changes to the profit distribution policy;
(vii) other matters stipulated by laws, administrative regulations, the securities regulatory
rules of the place where the shares of the Company are listed, or the Articles of
Association, as well as other matters that the General Meeting determines by
ordinary resolution will have a significant impact on the Company and need to be
passed by special resolution.
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-14 –


--- page 547 ---
Shareholders shall exercise their voting rights according to the number of voting shares
they represent, and each share shall have one vote.
Where any major matter that has an impact on the interests of minority investors is
considered at a general meeting, the votes casted by minority investors shall be counted
separately. The results of the separate counting shall be disclosed to the public in a timely
manner.
Shares of the Company held by the Company shall carry no voting rights, and be excluded
from the total voting shares held by shareholders present at a general meeting.
Shareholders, who purchase the voting shares of the Company in violation of provisions
of the first clause and the second clause of Article 63 of the Securities Law, shall not exercise
the voting rights of the Shares that exceed the prescribed ratio within 36 months after such
purchase, and such shares shall not be counted among the total number of Shares with voting
rights at a general meeting.
The Board of Directors, an independent director, a shareholder holding more than 1% of
voting shares of the Company or an investor protection institution formed in accordance with
laws, administrative regulations, or the rules of the CSRC may publicly solicit proxies. In
proxy solicitation, the voting intention and other relevant information shall be fully disclosed
to the shareholders from whom proxy is solicited. Proxy solicitation with the provision of
direct or indirect compensation shall be prohibited. The Company may not impose any
minimum shareholding requirement for proxy solicitation, except under statutory conditions.
When the general meeting considers matters relating to a related party transaction, the
related shareholders may attend the general meeting and present their views to the attending
shareholders in accordance with the procedures of the general meeting but shall not participate
in the vote and the number of voting shares represented by them shall not be counted toward
the total number of valid voting shares. The announcement of the resolutions of the general
meeting shall adequately disclose information relating to voting by non-related shareholders.
The chairman of the meeting shall, before any proposal on related party transactions is
considered at the general meeting, inform related shareholders that they are not entitled to vote
on the proposal. The votes cast by any related shareholder on related party transactions in
violation of aforesaid provision shall be invalid.
When the general meeting votes on the election of directors, if the number of directors
to be elected is more than one, the cumulative voting system shall be implemented. In addition
to the cumulative voting system, the general meeting shall resolve on all the proposed
resolutions separately; in the event of several proposed resolutions for the same issue, such
proposed resolutions shall be voted on and resolved in the order of time at which they are
submitted. Unless the general meeting is adjourned or no resolution can be made for special
reasons such as force majeure, voting of such proposed resolutions shall neither be put aside
nor denied at the general meeting.
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-15 –


--- page 548 ---
When considering a proposed resolution, the general meeting shall not revise it; if an
amendment is made, it shall be deemed as a new proposed resolution and may not be voted on
during the current general meeting. The same vote may only be cast once at the location of a
general meeting, or by online voting or other means. Where the same vote is cast for two or
more times, the first cast shall hold.
BOARD OF DIRECTORS
Directors
Directors shall be elected or replaced by the general meeting, and may further be removed
from their office prior to the conclusion of the term thereof by the general meeting. The term
of office of a director shall be three years, which is renewable upon re-election.
The tenure of a director shall be from the date of appointment to the expiry of tenure of
the current board of directors. If a director’s tenure expires but a re-elected director is not
elected in time, then before the re-elected director holding office, the original director shall
still perform the duties as director, in accordance with the laws, administrative regulations,
departmental rules and the Articles of Association.
Directors may be concurrently held by senior management members, but the total number
of directors concurrently serving as senior management members and directors who are
employee representatives shall not exceed one half of the total number of directors of the
Company.
Directors shall observe the provisions of laws, administrative regulations, the securities
regulatory rules of the place where the shares of the Company are listed and the Articles of
Association with the obligations of loyalty to the Company, take measures to avoid conflicts
between their own interests and the Company’s interests, and must not abuse their authority to
seek improper benefits. The Directors shall fulfill the following obligations of loyalty to the
Company:
(i) not to misappropriate the Company’s properties or divert the funds of the Company;
(ii) not to deposit any funds of the Company in an account opened in their names or in
the names of others;
(iii) not to abuse their authority in bribes or accepting other unlawful income;
(iv) not to enter into any contract or conduct any transaction, directly and indirectly, with
the Company without reporting to the Board of Directors or the general meeting and
obtaining approval through resolutions by the Board of Directors or the general
meeting as stipulated in the Articles of Association;
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-16 –


--- page 549 ---
(v) not to take advantage of their positions to seek any business opportunities that are
due to the Company for themselves or others prior to obtaining approval from the
general meeting, unless such business opportunities are not available to the
Company upon reporting to the Board of Directors or the general meeting and
obtaining approval through resolutions by the general meeting or as required in
laws, administrative regulations, the securities regulatory rules of the place where
the Company’s shares are listed or the Articles of Association;
(vi) not to conduct any businesses similar to those of the Company for themselves or
others without reporting to the Board of Directors or the general meeting and
obtaining approval through resolutions by the general meeting;
(vii) not to take any commission for any transaction between other parties and the
Company as their own;
(viii) not to disclose any secret of the Company;
(ix) not to use his or her connected relationships to harm the interests of the Company;
(x) to fulfill other obligations of loyalty stipulated by laws, administrative regulations,
departmental rules, the securities regulatory rules of the place where the shares of
the Company are listed, and the Articles of Association.
Directors’ income derived from violation of the above-mentioned provision shall belong
to the Company; and directors shall be liable to compensate any loss incurred to the Company.
Directors shall observe laws, administrative regulations, the securities regulatory rules of
the place where the shares of the Company are listed and the Articles of Association to perform
their obligations of diligence to the Company. They shall fulfill their obligations with
reasonable care generally due to managers in the best interests of the Company. Directors
fulfill the following obligations of diligence to the Company:
(i) to prudently, conscientiously and diligently exercising the rights granted him or her
by the Company, so as to ensure that the commercial acts of the Company comply
with state laws, administrative regulations and the requirements of the various
economic policies of the state, and that its commercial activities do not exceed the
scope of business specified on the business license;
(ii) to treat all shareholders impartially;
(iii) to keep informed of the operation and management conditions of the Company;
(iv) to sign the written confirmation in respect of the regular reports of the Company to
assure that the information disclosed by the Company is true, accurate and complete;
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-17 –


--- page 550 ---
(v) to honestly provide the Audit Committee with relevant information and data, and not
to prevent the Audit Committee from performing its duties and powers;
(vi) to fulfill other obligations of diligence stipulated by laws, administrative
regulations, departmental rules, the securities regulatory rules of the place where the
shares of the Company are listed and the Articles of Association.
A director who fails to attend the meeting of the Board of Directors in person for two
consecutive times and does not appoint other directors to attend the meeting shall be deemed
unable to perform his or her duties and the Board of Directors shall recommend the general
meeting to replace him or her. If an independent director fails to attend the meeting of the
Board of Directors in person for two consecutive times, and does not appoint another
independent director to attend the meeting on his or her behalf, the Board of Directors shall
propose the convening of a general meeting to remove him/her from his/her position within 30
days from the date of occurrence of such facts.
A director may resign prior to expiry of his/her tenure. A resigning director shall submit
a written resignation report to the Company, and the resignation shall become effective on the
date the Company receives the resignation report. The Company shall disclose the relevant
information as soon as practicable (but shall not more than two trading days). The written
resignation letter of an independent director should describe any circumstances relating to his
or her resignation or which he or she considers necessary to bring to the attention of the
shareholders and creditors of the Company. The Company shall disclose the reasons and
concerns of the resignation of independent Directors. If the number of members of the Board
of Directors of the Company shall fall below the statutory quorum as a result of the resignation
of a director, the said director shall continue fulfilling the duties as director pursuant to laws,
administrative regulations, departmental rules, the securities regulatory rules of the place
where the shares of the Company are listed and the Articles of Association until a new director
is elected. If the resignation of an independent director would result in the proportion of
independent directors on the Board of Directors or its special committees not in compliance
with the provisions of the Administrative Measures for Independent Directors of Listed
Companies (), the securities regulatory rules of the place
where the shares of the Company are listed or the Articles of Association, or if there is a lack
of accounting professionals among the independent directors, the resigning independent
director shall continue to perform his/her duties until a new independent director is appointed.
The Company shall complete the by-election within sixty days from the date on which the
resignation is tendered.
When a director’s resignation comes into effect or his/her term of service expires, the
director shall complete all transfer procedures with the Board of Directors. His/her fiduciary
duties towards the Company and the shareholders do not necessarily cease after the end of
his/her term of service and will be still in effective for a reasonable period specified by the
Articles of Association. Responsibilities that should be undertaken by a director in connection
with his/her performance of duties during his/her term of office shall not be waived or
terminated as a result of such departure.
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-18 –


--- page 551 ---
If a director causes damages to others in performing duties for the Company, the
Company shall be liable for compensation; and if such damages are out of the intent or gross
negligence of the director, he/she shall also be liable for compensation. A director that violates
laws, administrative regulations, departmental rules, the securities regulatory rules of the place
where the shares of the Company are listed or the Articles of Association and causes losses to
the Company in performing duties of the Company shall be liable for compensation. If, without
the approval of the Board of Directors or the general meeting, a director provides guarantee for
others with the Company’s property without authorization, the Board of Directors shall
recommend to the general meeting that he or she be replaced; and if the Company suffers any
loss as a result of such a guarantee, the director concerned shall be liable to pay compensation.
Board of Directors
The Company shall have a Board of Directors. The Board of Directors consists of nine
directors, including one employee representative director and at least one third of the
independent directors.
The Board of Directors shall exercise the following powers and duties:
(i) to be responsible for convening the general meeting and reporting its work to the
general meeting;
(ii) to implement the resolutions adopted by the general meeting;
(iii) to determine the Company’s business plans and investment plans;
(iv) to formulate the Company’s profit distribution plans and plans to cover losses;
(v) to formulate the plans for the increase or reduction of the Company’s registered
capital and the plans for the issuance of the Company’s bonds or other securities and
listing plans;
(vi) to draft the plans for major acquisitions, repurchases of the Company’s shares or
merger, division, dissolution or change of the corporate form of the Company;
(vii) to determine, within the scope authorized by the general meeting, such matters as the
Company’s external investments, the purchase and sale of assets, asset mortgages,
external guarantees, entrusted wealth management, related-party transactions and
external donations;
(viii) to decide on the establishment of the Company’s internal management
organizations;
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-19 –


--- page 552 ---
(ix) to decide to appoint or remove the Company’s general manager and the secretary of
the Board of Directors, and decide on matters relating to their remuneration and
rewards; and according to the nomination of the general manager, to decide to
appoint or remove the senior management members of the Company, such as the
deputy general manager and chief financial officer and decide on matters relating to
their remuneration and rewards;
(x) to determine the related party transactions between the Company and related legal
persons with an amount of more than RMB3 million and accounting for more than
0.5% but less than 5% of the absolute value of the Company’s latest audited net
assets; to determine the related party transactions between the Company and related
natural persons with an amount of more than RMB300,000 and accounting for less
than 5% of the absolute value of the Company’s latest audited net assets;
(xi) to consider and approve the transaction that meets one of the following criteria
(where the relevant data in the below indicators is negative, the absolute value shall
be used for calculation):
a) the total assets (where the total assets involved in the transaction have both
book value and appraised value, whatever is higher shall prevail) involved in
the transaction account for more than 10% but less than 50% of the Company’s
latest audited total assets;
b) the net assets (where the net assets involved in the transaction have both book
value and appraised value, whatever is higher shall prevail) involved in the
subject matter of the transaction (e.g., equity interests) account for more than
10% but less than 50% of the Company’s latest audited net assets and their
absolute amount exceeds RMB10 million;
c) the transaction amount of the transaction (including the debt and expenses)
accounts for more than 10% but less than 50% of the Company’s latest audited
net assets, with an absolute amount exceeding RMB10 million;
d) the profit derived from the transaction accounts for more than 10% but less
than 50% of the Company’s audited net profit for the latest accounting year,
with an absolute amount exceeding RMB1 million;
e) the revenue related to the subject of the transaction (e.g., equity interest) for
the latest accounting year accounts for more than 10% but less than 50% of the
Company’s audited revenue for the latest accounting year, with an absolute
amount exceeding RMB10 million;
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-20 –


--- page 553 ---
f) the net profit related to the subject of the transaction (e.g., equity interest) for
the latest accounting year accounts for more than 10% but less than 50% of the
Company’s audited net profit for the latest accounting year, with an absolute
amount exceeding RMB1 million.
(xii) to formulate a preliminary plan for the allowance standards of independent directors
of the Company;
(xiii) to formulate the basic management systems of the Company;
(xiv) to formulate any proposed amendment to the Articles of Association;
(xv) to manage the information disclosure of the Company;
(xvi) to propose to the general meeting the appointment or replacement of an accounting
firm that performs audits for the Company;
(xvii) to listen to the work report of the general manager of the Company and inspect the
work of the general manager;
(xviii) other powers and duties conferred by laws, administrative regulations, departmental
rules, securities regulatory rules of the place where the shares of the Company are
listed, the Articles of Association or general meeting.
External guarantees that are required to be examined and approved by the Board of
Directors must be approved by more than one half of all the directors of the Company, and shall
be passed by more than two-thirds of the directors present at the Board meeting.
The Board of Directors shall have a chairman and a vice chairman, who shall be elected
by the Board of Directors with approval of more than half of all the directors.
The chairman of the Board of Directors shall exercise the following powers and functions:
(i) to chair the general meetings and convene and chair the board meetings;
(ii) to supervise and inspect the implementation of resolutions passed by the Board of
Directors;
(iii) to exercise other functions and powers conferred by the Board of Directors.
The vice chairman of the Company shall assist the chairman of the board, and if the
chairman of the board is unable to perform his duties or does not perform his/her duties, the
vice chairman shall perform his duties, and if the vice chairman is unable to perform his duties
or does not perform his duties, the majority of the directors shall jointly elect a director to
perform his duties.
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-21 –


--- page 554 ---
The Board of Directors shall convene regular board meeting at least four times each year
at an interval of approximately once a quarter. The meeting shall be convened by the chairman
and all the directors shall be notified in writing 14 days prior to the meeting.
Shareholders representing more than one-tenth of the voting rights, or more than
one-third of the Board of Directors or the Audit Committee, may propose to convene an
extraordinary general meeting of the Board of Directors. The chairman shall convene and
preside over the meeting of the Board of Directors within 10 days after receiving the proposal.
The board meeting shall be held upon the attendance by more than half of directors.
Resolutions of the Board of the Directors shall be passed by more than half of all directors.
Resolutions of the Board of the Directors are voted by way of poll with each director having
one vote.
The directors shall attend in person the meetings of the Board of Directors. Where any
director who cannot attend for reasons may entrust another director in writing to attend. The
power of attorney shall specify the name of the agent, the matters to be represented, the scope
of authorization, and the period of validity, and shall be signed or stamped by the principal. The
directors who attend the meeting on behalf shall exercise the rights as directors within the
scope of authorization. Failure by a director to attend a meeting of the Board of Directors or
to authorize a representative to attend the meeting on his/her behalf shall be deemed a waiver
of the voting right at such meeting.
Independent Directors
The independent directors, as members of the Board of Directors, shall have fiduciary
obligations and diligent obligations towards the Company and all shareholders, and shall
prudently perform the following duties:
(i) to participate in the decision-making process of the Board of Directors and offer
clear opinions on the matters under deliberation;
(ii) to supervise matters relating to potential material conflicts of interest between the
Company and its controlling shareholders, de facto controllers, directors and senior
management, and to protect the legitimate rights and interests of small and medium
shareholders;
(iii) to provide professional and objective advice on the Company’s operations and
development, and to help improve the decision-making standards of the Board of
Directors;
(iv) to perform any other duties as required by the laws, administrative regulations, the
CSRC, the securities regulatory rules of the place where the shares of the Company
are listed and the Articles of Association.
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-22 –


--- page 555 ---
The independent directors shall exercise the following special functions and powers:
(i) independently engaging intermediaries to audit, consult or verify specific matters of
the Company;
(ii) proposing to the Board of Directors the convening of an extraordinary general
meeting;
(iii) proposing to convene a meeting of the Board of Directors;
(iv) to openly solicit shareholders’ rights from shareholders in accordance with the law;
(v) expressing independent opinions on matters that may jeopardize the interests of the
Company or minority shareholders;
(vi) other powers and functions prescribed by laws, administrative regulations, the
CSRC, the securities regulatory rules of the place where the shares of the Company
are listed, and the Articles of Association.
The exercise of the powers and functions listed in (i) to (iii) of the preceding paragraphs
by an independent director shall be approved by a majority of all independent directors.
Special Committees of the Board of Directors
The Board of Directors of the Company has established the Audit Committee to exercise
the powers and functions of the supervisory committee as stipulated in the Company Law as
well as the powers and functions as stipulated in the securities regulatory rules of the place
where the shares of the Company are listed.
The Audit Committee shall consist of at least three members, who shall be non-executive
directors who do not hold senior management positions in the Company, of whom a majority
shall be independent directors. The Audit Committee shall be convened by an accounting
professional among the independent directors, at least one of whom shall have appropriate
professional qualifications in accordance with the securities regulatory rules of the place where
the shares of the Company are listed or who shall have appropriate accounting or related
financial management expertise.
The Audit Committee is responsible for reviewing the Company’s financial information
and its disclosures, supervising and evaluating the internal and external audits and internal
controls. The following matters shall be submitted to the Board of Directors for consideration
after the approval by a majority of all members of the Audit Committee:
(i) disclosure of financial information in financial accounting reports and periodic
reports, and internal control evaluation reports;
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-23 –


--- page 556 ---
(ii) appointment, re-appointment or dismissal of the accounting firm that undertake the
audit affair of the listed company, approval of the remuneration and terms of
appointment of the accounting firm, and handling of any issues relating to the
resignation or dismissal of the accounting firm;
(iii) appointment or dismissal of the financial controller of the listed company;
(iv) changes in accounting policies, accounting estimates or correction of material
accounting errors for reasons other than changes in accounting standards;
(v) other matters as provided by laws, administrative regulations, the CSRC, the
securities regulatory rules of the place where the shares of the Company are listed
and the Articles of Association.
In addition to the Audit Committee, the Board of Directors of the Company has
established other special committees, including the Strategy and Sustainability Committee, the
Nomination Committee and the Remuneration and Appraisal Committee to perform their duties
in accordance with the securities regulatory rules of the place where the shares of the Company
are listed, the Articles of Association and the authorization of the Board of Directors. The
proposals of the special committees shall be submitted to the Board of Directors for
deliberation and decision. The Board of Directors shall be responsible for formulating the
terms of reference of the special committees.
A majority of the members of the Nomination Committee and the Remuneration and
Appraisal Committee shall be independent directors, and the Nomination Committee shall have
at least one director of a different gender. An independent director or the chairman of the Board
of Directors shall act as the convener of the Nomination Committee, and an independent
director shall act as the convener of the Remuneration and Appraisal Committee.
The Nomination Committee is responsible for formulating the standards and procedures
for the selection of directors and senior management members, selecting and reviewing the
candidates for directors and senior management members and their qualifications for office,
and making recommendations to the Board of Directors on the following matters:
(i) review the structure, number of members and composition of the Board of Directors
(including the skills, knowledge and experience) at least once a year, assist the
Board of Directors in maintaining a Board of Directors skills matrix, and make
recommendations on any proposed changes to the Board of Directors to cooperate
with the Company’s corporate strategy;
(ii) identify individuals suitably qualified to become board members and select or make
recommendations to the board on the selection of individuals nominated for
directorships;
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-24 –


--- page 557 ---
(iii) the nomination, appointment, removal or reappointment of directors and the
succession planning for directors, in particular the chairman and general manager;
(iv) the appointment or dismissal of senior management;
(v) the assessment of the independence of independent directors;
(vi) support the Company’s regular evaluation of the performance of the Board of
Directors;
(vii) other matters as provided by laws, administrative regulations, the CSRC, the
securities regulatory rules of the place where the shares of the Company are listed
and the Articles of Association.
The Remuneration and Appraisal committee is responsible for formulating the evaluation
criteria for directors and senior management and conducting the evaluation, preparing and
reviewing the remuneration policies and programs for directors and senior management such
as the mechanism for determining the remuneration of directors and senior management, the
decision-making process, and the arrangements for the payment and stoppage of recourse, and
making recommendations to the Board of Directors on the following matters:
(i) the remuneration of directors and senior management;
(ii) formulating or changing the share incentive scheme and employee share ownership
scheme, granting of rights and benefits to the targets of the incentives and
fulfillment of the conditions for exercising the rights and benefits;
(iii) arranging share ownership schemes for directors and senior management in the
subsidiaries proposed to be spun off;
(iv) other matters as provided by laws, administrative regulations, the CSRC, the
securities regulatory rules of the place where the shares of the Company are listed
and the Articles of Association.
Senior Management Members
The Company shall have one general manager, who shall be decide on the appointment
or dismissal by the Board of Directors. The Company shall have several deputy general
managers, who shall be decide on the appointment or dismissal by the Board of Directors.
The provisions of the Articles of Association relating to the obligations of loyalty and
diligence of the directors, shall also apply to senior management members.
The term of office of the general manager is three years , and he or she can be re-elected
if re-appointed.
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-25 –


--- page 558 ---
The general manager shall be accountable to the Board of Directors and shall exercise the
following powers:
(i) to preside over the operation and management of the Company, organize the
implementation of the resolutions of the Board of Directors, and report to the Board
of Directors;
(ii) to organize the implementation of the Company’s annual operation plans and
investment plans;
(iii) to draft the plan for the establishment of the Company’s internal management
organizations;
(iv) to draft the basic management policy of the Company;
(v) to formulate specific rules and regulations of the Company;
(vi) to propose to the Board of Directors on the appointment or dismissal of the
Company’s deputy general manager and financial controller;
(vii) to determine to appoint or dismiss the management personnel except for those who
should be appointed or dismissed by the Board of Directors;
(viii) to formulate the plans for the salary, benefits, rewards and punishments of the
Company’s employees, and to determine the employment and dismissal of the
Company’s employees;
(ix) to represent the Company in external matters and enter into contracts for the
day-to-day business of the Company as authorized by the Board of Directors;
(x) such other powers granted by the Board of Directors.
The Company has a secretary to the Board of Directors. The secretary to the Board of
Directors is a senior management of the Company and shall be accountable to the Company and
the Board of Directors. The secretary to the Board of Directors shall have the requisite
professional knowledge in terms of finance, management and law, and possess good
professional ethics and personal quality.
The secretary to the Board of Directors shall primarily perform the following duties:
(i) to be responsible for the Company’s information disclosure affairs, coordinate the
Company’s information disclosure, organize and formulate the Company’s
information disclosure affairs management system, and urge the Company and the
relevant information disclosure obligors to comply with the relevant information
disclosure regulations;
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-26 –


--- page 559 ---
(ii) to be responsible for investor relations management, coordinate the information
communication between the Company and securities regulatory authorities,
investors, de facto controllers, intermediary agencies, media, etc.;
(iii) to prepare and organize board meetings and general meetings, attend the general
meetings, meetings of the Board of Directors, meetings of the special committees
and meetings of the senior management, and be responsible for making records for
the meetings of the Board of Directors and sign such records;
(iv) to be responsible for the confidentiality of the Company’s information disclosure,
and to report and disclose any leakage of major undisclosed information to the
Shanghai Stock Exchange in a timely manner;
(v) to pay attention to media coverage and take the initiative to verify the truth, and urge
the relevant parties in the Company to reply to the inquiries of the Shanghai Stock
Exchange in a timely manner;
(vi) to arrange trainings on the relevant laws and regulations and the relevant rules of the
Shanghai Stock Exchange for the Company’s directors and senior management, and
to assist such persons to understand their responsibilities in respect of information
disclosure;
(vii) to urge the directors and senior management to abide by the laws and regulations,
the relevant rules of the Shanghai Stock Exchange and the Articles of Association,
and to effectively fulfil their commitments; when he/she is aware that the Company,
directors and senior management have made or may make resolutions that violate
the relevant provisions, he/she shall remind them and report the same to the
Shanghai Stock Exchange in a timely manner;
(viii) to be responsible for the management of the changes in the Company’s shares and
the derivatives thereof;
(ix) other duties as required under the laws, regulations and the Shanghai Stock
Exchange.
FINANCIAL ACCOUNTING SYSTEM, DISTRIBUTION OF PROFITS AND AUDIT
Financial Accounting System
The Company shall formulate its financial accounting systems in accordance with laws,
administrative regulations, the securities regulatory rules of the place where the shares of the
Company are listed and regulations of relevant departments of the State.
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-27 –


--- page 560 ---
The Company shall submit and disclose the annual report to the local branch of CSRC and
the stock exchanges within four months after the end of each accounting year, and submit and
disclose the interim report to the local branch of CSRC and the stock exchanges within two
months after the end of the first half of each accounting year. The above annual reports and
interim reports shall be prepared in accordance with relevant laws, administrative regulations,
the CSRC and regulations of the securities regulatory authorities and stock exchanges in the
places where the shares of the Company are listed.
The Company shall not establish accounts books other than those provided by law. Any
assets of the Company shall not be kept under any account opened in the name of any
individual.
When distributing after-tax profits of the year, the Company shall allocate 10% of its
after-tax profits for the Company’s statutory reserve fund. When the aggregate balance in the
statutory reserve fund has reached 50% or more of the Company’s registered capital, the
Company needs not to make any further allocations to that fund.
Where the Company’s statutory reserve fund is not enough to make up losses of the
Company for the preceding year, the current year’s profits shall be applied firstly to make up
the losses before being allocated to the statutory reserve in accordance with the preceding
provision. Subject to a resolution passed at a shareholders’ meeting, after allocation has been
made to the Company’s statutory reserve fund from its after-tax profits, the Company may set
aside funds for the discretionary reserve fund from its after-tax profits. Except for those not
distributed in proportion as prescribed in the Articles of Association, the remaining after-tax
profit, after recovery of losses and appropriation of reserve funds, shall be distributed to
shareholders in proportion to their shareholdings.
If the general meeting distributes profits to shareholders in violation of the provisions of
the Company Law, shareholders shall refund to the Company the profits distributed in violation
of the provisions; if losses are caused to the Company, the shareholders, the responsible
Directors and senior management shall be liable for compensation.
No profit shall be distributed in respect of the shares of the Company which are held by
the Company.
The reserve fund of the Company shall be used for making up for the loss, expansion of
the operation or increase of capital of the Company. The discretionary reserve and the statutory
reserve shall first be used in making up the losses of the Company, and for any losses left to
be set off, the capital reserve may be utilized in accordance with the provisions. When the
registered capital is increased by ways of conversion of the statutory reserve fund, the retained
portion of the fund shall not be less than 25% of the registered capital of the Company before
the capitalization.
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-28 –


--- page 561 ---
Principle of profit distribution: The Company’s profit distribution shall emphasise
reasonable investment returns to public shareholders, aim at sustainable development and
protection of shareholders’ rights and interests, and shall maintain the continuity and stability
of the profit distribution policy in compliance with the relevant provisions of laws and
regulations.
Method of profit distribution: The Company may distribute profits in the form of cash,
shares or a combination of both, or in any other manner permitted by laws with cash dividends
taking precedence over other profit distribution methods. In principle, profit distribution shall
be made on an annual basis if the conditions for profit distribution are met, and the Company
may make interim profit distribution if conditions are met. Where the conditions for cash
dividend are met, the Company shall adopt cash dividend for profit distribution. Where share
dividends are adopted for profit distribution, real and reasonable factors such as the growth of
the Company and the dilution of net assets per share should be taken into account.
Internal Audit
The Company shall implement its internal audit system, which specifies the leadership
system, duties and responsibilities, staffing, financial protection, the use of audit results and
accountability for internal audit. The Company’s internal audit system is implemented after
approval by the Board of Directors and is disclosed to the public. The internal audit department
of the Company conducts supervision and inspection of the business activities, risk
management, internal control, financial information and other matters of the Company.
Appointment of an Accounting Firm
The Company shall appoint such accounting firm which has complied with the Securities
Law, and the securities regulatory rules of the place where the shares of the Company are listed
for carrying out the audit for the accounting statements, net asset verification, and other
relevant consultancy services. The term of appointment shall be 1 year and can be re-appointed.
The appointment or dismissal of accounting firm by the Company shall be subject to the
approval of the general meeting. The Board of Directors shall not appoint accounting firm
before the approval of the general meeting. The Company guarantees that it shall provide the
appointed accounting firm with true and complete accounting proofs, accounting books,
financial accounting reports and other accounting information, and that it engages without any
refusal, withholding, and misrepresentation.
The audit fee of the accounting firm shall be determined by the general meeting. In the
event of termination of the appointment or non-renewal of appointment of an accounting firm,
the Company shall notify the accounting firm 10 days in advance; when the shareholders cast
their votes at the general meeting on termination of appointment of an accounting firm, the
accounting firm shall be allowed to make its representation thereat.
An accounting firm proposing to resign shall state its opinions in the general meeting
whether the Company has committed any improper act.
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-29 –


--- page 562 ---
Notice And Announcement
Notices of the Company shall be sent by the following means:
(i) by hand;
(ii) by post;
(iii) by fax or email;
(iv) in case of urgency, an oral notification may be made, subject to written confirmation
by the person to be notified;
(v) by announcement;
(vi) by other means acceptable to the securities regulatory rules of the place where the
shares of the Company are listed or provided by the Articles of Association.
Where a notice issued by the Company is in the form of an announcement, all relevant
persons are deemed to have received the notice once the announcement is made.
Notice of a general meeting of the Company shall be given by announcement. Notice of
a meeting of the Board of Directors convened by the Company shall be given by hand, post,
fax or e-mail, except for otherwise provided in the Articles of Incorporation when an
extraordinary meeting of the Board of Directors is convened for urgent reasons.
MERGER, DIVISION, CAPITAL INCREASE, CAPITAL REDUCTION, DISSOLUTION
AND LIQUIDATION
Merger, Division, Capital Increase and Capital Reduction
If the Company is involved in a merger, the parties to the merger shall enter into a merger
agreement, and shall prepare a balance sheet and a property list. The Company shall notify its
creditors within 10 days as of the date of the resolution for the merger and shall publish an
announcement through designated media or on the National Enterprise Credit Information
Publicity System (ʮͪӻ୕) within 30 days as of the date of such
resolution. A creditor may within 30 days as of the receipt of the notice or, in case where he/she
fails to receive such notice within 45 days of the date of the announcement, to demand the
Company to repay its debts or provide guarantees for such debts.
Where there is a division of the Company, its assets shall be divided accordingly. Where
there is a division of the Company, a balance sheet and property list shall be prepared. The
Company shall notify its creditors within 10 days as of the date of the resolution for the
division and shall publish an announcement through designated media or on the National
Enterprise Credit Information Publicity System (ʮͪӻ୕) within 30 days
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-30 –


--- page 563 ---
as of the date of such resolution. Unless a written agreement has been entered into, before the
division, by the Company and its creditors in relation to the repayment of debts, debts of the
Company prior to the division shall be jointly assumed by the surviving companies after the
division.
Where the Company needs to reduce its registered capital, it shall prepare a balance sheet
and property list. The Company shall notify its creditors within 10 days as of the date of the
resolution for the reduction of its registered capital by the general meeting and shall publish
an announcement through designated media or on the National Enterprise Credit Information
Publicity System (ʮͪӻ୕) within 30 days as of the date of such
resolution. A creditor may within 30 days as of the receipt of the notice or, in case where he/she
fails to receive such notice within 45 days of the date of the announcement, to demand the
Company to repay its debts or provide guarantees for such debts. If the Company reduces its
registered capital, it shall reduce the amount of capital contribution or shares in accordance
with the proportion of capital contributed or shares held by shareholders, unless otherwise
provided by law or otherwise provided in the Articles of Association.
When the Company issues new shares to increase its registered capital, shareholders do
not have preemptive rights, unless otherwise stipulated in the Articles of Association or a
resolution of the general meeting grants shareholders preemptive rights.
Dissolution and Liquidation
The Company shall be dissolved upon the occurrence of the following events:
(i) other cause of dissolution as specified in the Articles of Association;
(ii) a resolution on dissolution is passed by a shareholders’ meeting;
(iii) dissolution is required due to the merger or division;
(iv) the business license of the Company is revoked or the Company is ordered to close
down or dissolved in accordance with the laws;
(v) the Company suffers significant hardships in operation and management, and its
continued existence would cause significant losses to shareholders’ interests, and
such issues cannot be resolved through other means, shareholders representing 10%
or above of the total voting rights of the Company may plead the people’s court to
dissolve the Company.
On the occurrence of the events of dissolution set out in the preceding provisions, the
Company shall make an announcement via the National Enterprise Credit Information
Publicity System (ʮͪӻ୕) within ten days.
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-31 –


--- page 564 ---
Where the Company is dissolved under (i), (ii), (iv) and (v) above, it shall be liquidated.
The Directors, being the liquidation obligors of the Company shall form a liquidation team for
liquidation within fifteen days from the date of occurrence of the cause for dissolution to carry
out liquidation. The liquidation team shall consist of the directors, unless the Articles of
Association provide otherwise or the general meeting resolve to elect another person(s).
The liquidation team shall exercise the following functions and powers:
(i) to inform creditors by notice or announcement;
(ii) to examine and take possession of the assets of the Company and prepare the balance
sheet and a property inventory;
(iii) to deal with the outstanding businesses of the Company relating to liquidation;
(iv) to pay all outstanding taxes and taxes incurred during the liquidation proceedings;
(v) to settle creditor’s rights and debts;
(vi) to distribute the remaining assets of the Company after repayment of debts;
(vii) to represent the Company in civil proceedings.
The liquidation team shall, within 10 days of its formation, notify the creditors, and shall,
within 60 days, make a public announcement on the designated media of the place where the
Company locates or on National Enterprise Credit Information Publicity System. Creditors
shall, within 30 days of the receipt of the notice or within 45 days of the release of the public
announcement in the case of failure to receive said notice, file their creditors’ rights with the
liquidation team. Where creditors file their creditors’ rights, they shall explain about the
matters related to creditors’ rights, and shall provide the evidencing materials. The liquidation
team shall register the creditors’ rights. The liquidation team may not clear off any of the debts
of any creditors during the period of filing creditors’ rights.
After the liquidation team has liquidated the Company’s property and prepared a balance
sheet and property list, it shall formulate a liquidation plan and submit such plan to the general
meeting or the people’s court for confirmation. The Company’s property remaining after
payment of the liquidation expenses, the wages, social insurance premiums and statutory
compensation of the employees, the taxes owed and all the Company’s debts, shall be
distributed by the Company to the shareholders in proportion to the shares they hold. During
liquidation, the Company shall continue to exist but may not engage in any business activities
unrelated to the liquidation. The Company’s property will not be distributed to the shareholders
until repayment of its debts in accordance with the preceding paragraph.
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-32 –


--- page 565 ---
Following the completion of liquidation, the liquidation team shall formulate a
liquidation report, submit the same to the general meeting or the people’s court for
confirmation, and submit the aforementioned documents to the company registration authority
to apply for company deregistration.
The members of the liquidation team shall perform their liquidation duties with loyalty
and diligence. If the members of the liquidation team are negligent in performing their
liquidation duties and cause losses to the Company, they shall be liable for compensation. The
members of the liquidation team shall be liable for compensation in respect of any loss to the
creditors caused by willful or material default; and shall be liable for compensation in respect
of any loss to the Company or the creditors caused by willful or material default.
Amendments to the Articles Of Association
Under any of the following circumstances, the Company would amend the Articles of
Association:
(i) upon revision of the Company Law or the relevant laws, administrative regulations
and the securities regulatory rules of the place where the shares of the Company are
listed, any item contained in the Articles of Association contradict the stipulations
of the revised laws, administrative regulations and the securities regulatory rules of
the place where the shares of the Company are listed;
(ii) the Company’s situation has changed and is inconsistent with the items recorded in
the Articles of Association;
(iii) the general meeting has decided on making amendments to the Articles of
Association.
Where the amendments to the Articles of Association approved by the resolution of the
general meeting shall be subject to the approval by competent authorities, such amendments
shall be submitted to the competent authority for approval. Where the amendments involve
matters in relation to company registration, the procedures for change in registration shall be
completed.
The Board of Directors shall amend the Articles of Association pursuant to the resolution
of the general meeting on the amendments to the Articles of Association and the review and
approval opinion of competent authorities.
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
– III-33 –


--- page 566 ---
FURTHER INFORMATION ABOUT THE GROUP
Incorporation
The Company was established as a limited liability company under the laws of the PRC
on April 6, 2005 and was converted into a joint stock company with limited liability on
December 28, 2012.
The Company has established a place of business in Hong Kong at Room 1915, 19/F, Lee
Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong. The Company was registered as
a non-Hong Kong company in Hong Kong under Part 16 of the Companies Ordinance (Chapter
622 of the Laws of Hong Kong) and the Companies (Non-Hong Kong Companies) Regulation
(Chapter 622J of the Laws of Hong Kong) on June 6, 2025, with Ms. Wong Wai Y ee, Ella
appointed as the Hong Kong authorised representative of the Company for acceptance of the
service of process and any notices required to be served on the Company in Hong Kong.
As the Company was established in the PRC, its operations are subject to the relevant
laws and regulations of the PRC. A summary of the relevant aspects of laws and regulations
of the PRC and the Articles of Association is set out in “Regulatory Overview” and “Appendix
III — Summary of the Articles of Association” in this prospectus, respectively.
Changes in the Share Capital of the Company
An aggregate of 534,143 A Shares which were granted but locked restricted A Shares
repurchased by the Company were cancelled on July 22, 2024. The total issued share capital
of the Company decreased from RMB666,906,348 comprising 666,906,348 A Shares of
nominal value of RMB1.00 each to RMB666,372,205 comprising 666,372,205 A Shares of
nominal value of RMB1.00 each.
An aggregate of 500,000 A Shares repurchased by the Company were cancelled on July
24, 2024. The total issued share capital of the Company decreased from RMB666,372,205
comprising 666,372,205 A Shares of nominal value of RMB1.00 each to RMB665,872,205
comprising 665,872,205 A Shares of nominal value of RMB1.00 each.
An aggregate of 1,748,100 A Shares repurchased by the Company were cancelled on
November 21, 2024. The total issued share capital of the Company decreased from
RMB665,872,205 comprising 665,872,205 A Shares of nominal value of RMB1.00 each to
RMB664,124,105 comprising 664,124,105 A Shares of nominal value of RMB1.00 each.
An aggregate of 64,915 A Shares which were granted but locked restricted A Shares
repurchased by the Company were cancelled on January 21, 2025. The total issued share capital
of the Company decreased from RMB664,124,105 comprising 664,124,105 A Shares of
nominal value of RMB1.00 each to RMB664,059,190 comprising 664,059,190 A Shares of
nominal value of RMB1.00 each.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-1 –


--- page 567 ---
An aggregate of 29,214 A Shares which were granted but locked restricted A Shares
repurchased by the Company were cancelled on August 7, 2025. The total issued share capital
of the Company decreased from RMB664,059,190 comprising 664,059,190 A Shares of
nominal value of RMB1.00 each to RMB664,029,976 comprising 664,029,976 A Shares of
nominal value of RMB1.00 each.
An aggregate of 2,286,334 A Shares were issued by the Company on September 10, 2025
pursuant to the exercise of options granted under the 2023 Stock Option Incentive Plan. The
total issued share capital of the Company increased from RMB664,029,976 comprising
664,029,976 A Shares of nominal value of RMB1.00 each to RMB666,316,310 comprising
666,316,310 A Shares of nominal value of RMB1.00 each.
An aggregate of 961,662 A Shares were issued by the Company on October 14, 2025
pursuant to the exercise of options granted under the 2020 Stock Option Incentive Plan. The
total issued share capital of the Company increased from RMB666,316,310 comprising
666,316,310 A Shares of nominal value of RMB1.00 each to RMB667,277,972 comprising
667,277,972 A Shares of nominal value of RMB1.00 each.
An aggregate of 571,379 A Shares were issued by the Company on November 21, 2025
pursuant to the exercise of options granted under the 2021 Stock Option Incentive Plan. The
total issued share capital of the Company increased from RMB667,277,972 comprising
667,277,972 A Shares of nominal value of RMB1.00 each to RMB667,849,351 comprising
667,849,351 A Shares of nominal value of RMB1.00 each.
Save as disclosed above, there has been no alteration in the share capital of the Company
within two years immediately preceding the date of this prospectus.
Resolutions of the Shareholders
At the extraordinary general meeting of the Shareholders held on June 10, 2025, the
following resolutions, among other things, were duly passed:
(i) the issue by the Company of H Shares with a nominal value of RMB1.00 each and
such H Shares be listed on the Stock Exchange;
(ii) the number of H Shares to be issued shall be no more than 10% of the total issued
share capital of the Company as enlarged by the Global Offering, and the grant of
the Over-allotment Option in respect of no more than 15% of the number of H
Shares issued pursuant to the Global Offering;
(iii) authorization of the Board or its authorized individuals to handle all matters relating
to, among other things, the Global Offering, the issue and Listing of H Shares on the
Stock Exchange; and
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-2 –


--- page 568 ---
(iv) subject to the completion of the Global Offering, the conditional adoption of the
revised Articles of Association, which shall become effective on the Listing Date,
and the authorization to the Board to amend the Articles of Association in
accordance with the requirements of the relevant laws and regulations and the
Listing Rules.
Subsidiaries of the Company
A summary of the corporate information and the particulars of the Company’s subsidiaries
are set out in Note 1 to the Accountant’s Report as set out in Appendix I.
The following sets out the changes in the share capital of the Company’s subsidiaries and
the Company’s subsidiary incorporated within the two years immediately preceding the date of
this prospectus:
 On April 16, 2024, the registered capital of Xysemi decreased from RMB65,091,839
to RMB57,779,499.
 On July 11, 2024, XC Memory was established in the PRC with an initial registered
capital of RMB100,000,000.
 On July 31, 2024, CreMemory Technology was established in the PRC with an
initial registered capital of RMB27,000,000.
 On October 22, 2024, CreMemory Technology Singapore Pte. Ltd. was incorporated
in Singapore with an initial share capital of S$200,000.
 On December 10, 2024, Zhuhai Lingchuang Management Consulting Co., Ltd. ( म
ʮ̡) was established in the PRC with an initial registered
capital of RMB5,000,000.
 On March 19, 2025, Innolead Singapore Pte. Ltd. was incorporated in Singapore
with an initial share capital of US$300,000.
 On April 22, 2025, the registered capital of XC Memory increased from
RMB50,000,000 to RMB100,000,000.
 On November 27, 2025, the registered capital of GigaDevice Hefei increased from
RMB39,614,178 to RMB49,614,178.
Save as disclosed above, there has been no alteration in the share capital of the
subsidiaries of the Company within two years immediately preceding the date of this
prospectus.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-3 –


--- page 569 ---
FURTHER INFORMATION ABOUT THE BUSINESS
Summary of Material Contracts
The Group has entered into the following contracts (not being contracts entered into in the
ordinary course of business) within the two years immediately preceding the date of this
prospectus that are or may be material:
(a) a cornerstone investment agreement dated December 29, 2025 entered into among
the Company, Huatai Capital Investment Limited, China International Capital
Corporation Hong Kong Securities Limited and Huatai Financial Holdings (Hong
Kong) Limited, with respect to a subscription of H Shares at the Offer Price in the
aggregate amount of the Hong Kong dollar equivalent of US dollar 18,450,000 and
holding such H Shares on a non-discretionary basis to hedge a series of cross border
OTC swap transactions entered into by Huatai Capital Investment Limited, Huatai
Securities Co., Ltd. and Beijing Y uanfeng Asset Management L.L.P . (ӷ෍
၍ଣΥྫΆุ(Υྫ));
(b) a cornerstone investment agreement dated December 29, 2025 entered into among
the Company, CPE Greater China Enterprises Growth Fund, China International
Capital Corporation Hong Kong Securities Limited and Huatai Financial Holdings
(Hong Kong) Limited, with respect to a subscription of H Shares at the Offer Price
in the aggregate amount of the Hong Kong dollar equivalent of US dollar
20,380,000;
(c) a cornerstone investment agreement dated December 29, 2025 entered into among
the Company, CPE Growth Fund #1, China International Capital Corporation Hong
Kong Securities Limited and Huatai Financial Holdings (Hong Kong) Limited, with
respect to a subscription of H Shares at the Offer Price in the aggregate amount of
the Hong Kong dollar equivalent of US dollar 1,170,000;
(d) a cornerstone investment agreement dated December 29, 2025 entered into among
the Company, Huatai Capital Investment Limited, China International Capital
Corporation Hong Kong Securities Limited and Huatai Financial Holdings (Hong
Kong) Limited, with respect to a subscription of H Shares at the Offer Price in the
aggregate amount of the Hong Kong dollar equivalent of US dollar 30,000,000
(inclusive of brokerage, the SFC transaction levy, the Stock Exchange trading fee
and the AFRC transaction levy) and holding such H Shares on a non-discretionary
basis to hedge a series of cross border OTC swap transactions entered into by Huatai
Capital Investment Limited, Huatai Securities Co., Ltd. and Shanghai Greenwoods
Asset Management Co., Ltd. (ʮ̡);
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-4 –


--- page 570 ---
(e) a cornerstone investment agreement dated December 29, 2025 entered into among
the Company, New Alternative Limited, China International Capital Corporation
Hong Kong Securities Limited and Huatai Financial Holdings (Hong Kong) Limited,
with respect to a subscription of H Shares at the Offer Price in the aggregate amount
of the Hong Kong dollar equivalent of US dollar 25,000,000;
(f) a cornerstone investment agreement dated December 29, 2025 entered into among
the Company, New Golden Future Limited, China International Capital Corporation
Hong Kong Securities Limited and Huatai Financial Holdings (Hong Kong) Limited,
with respect to a subscription of H Shares at the Offer Price in the aggregate amount
of the Hong Kong dollar equivalent of US dollar 25,000,000;
(g) a cornerstone investment agreement dated December 29, 2025 entered into among
the Company, Dymon Asia Multi-Strategy Investment Master Fund, China
International Capital Corporation Hong Kong Securities Limited and Huatai
Financial Holdings (Hong Kong) Limited, with respect to a subscription of H Shares
at the Offer Price in the aggregate amount of the Hong Kong dollar equivalent of US
dollar 25,000,000;
(h) a cornerstone investment agreement dated December 29, 2025 entered into among
the Company, CloudAlpha Capital Management Limited, China International
Capital Corporation Hong Kong Securities Limited and Huatai Financial Holdings
(Hong Kong) Limited, with respect to a subscription of H Shares at the Offer Price
in the aggregate amount of the Hong Kong dollar equivalent of US dollar
20,000,000;
(i) a cornerstone investment agreement dated December 29, 2025 entered into among
the Company, 3W Fund Management Limited, China International Capital
Corporation Hong Kong Securities Limited and Huatai Financial Holdings (Hong
Kong) Limited, with respect to a subscription of H Shares at the Offer Price in the
aggregate amount of the Hong Kong dollar equivalent of US dollar 10,000,000;
(j) a cornerstone investment agreement dated December 29, 2025 entered into among
the Company, HUAQIN TELECOM HONG KONG LIMITED, China International
Capital Corporation Hong Kong Securities Limited and Huatai Financial Holdings
(Hong Kong) Limited, with respect to a subscription of H Shares at the Offer Price
in the aggregate amount of the Hong Kong dollar equivalent of US dollar
30,000,000;
(k) a cornerstone investment agreement dated December 29, 2025 entered into among
the Company, Metazone Link (HK) Limited, China International Capital
Corporation Hong Kong Securities Limited and Huatai Financial Holdings (Hong
Kong) Limited, with respect to a subscription of H Shares at the Offer Price in the
aggregate amount of the Hong Kong dollar equivalent of US dollar 20,000,000;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-5 –


--- page 571 ---
(l) a cornerstone investment agreement dated December 29, 2025 entered into among
the Company, Sky Royal Trading Limited, China International Capital Corporation
Hong Kong Securities Limited and Huatai Financial Holdings (Hong Kong) Limited,
with respect to a subscription of H Shares at the Offer Price in the aggregate amount
of the Hong Kong dollar equivalent of US dollar 10,000,000;
(m) a cornerstone investment agreement dated December 29, 2025 entered into among
the Company, Green Better Limited, China International Capital Corporation Hong
Kong Securities Limited and Huatai Financial Holdings (Hong Kong) Limited, with
respect to a subscription of H Shares at the Offer Price in the aggregate amount of
the Hong Kong dollar equivalent of US dollar 10,000,000;
(n) a cornerstone investment agreement dated December 29, 2025 entered into among
the Company, New China Asset Management (Hong Kong) Limited, China
International Capital Corporation Hong Kong Securities Limited and Huatai
Financial Holdings (Hong Kong) Limited, with respect to a subscription of H Shares
at the Offer Price in the aggregate amount of the Hong Kong dollar equivalent of US
dollar 10,000,000;
(o) a cornerstone investment agreement dated December 29, 2025 entered into among
the Company, Taikang Life Insurance Co., Ltd, China International Capital
Corporation Hong Kong Securities Limited and Huatai Financial Holdings (Hong
Kong) Limited, with respect to a subscription of H Shares at the Offer Price in the
aggregate amount of the Hong Kong dollar equivalent of US dollar 10,000,000;
(p) a cornerstone investment agreement dated December 29, 2025 entered into among
the Company, S Harmony Investment Fund SPC (acting for and on behalf of and for
the account of Summit Ridge Capital SP), S Harmony Asset Management Limited,
China International Capital Corporation Hong Kong Securities Limited and Huatai
Financial Holdings (Hong Kong) Limited, with respect to a subscription of H Shares
at the Offer Price in the aggregate amount of the Hong Kong dollar equivalent of US
dollar 10,000,000;
(q) a cornerstone investment agreement dated December 29, 2025 entered into among
the Company, ICBC Wealth Management Co., Ltd., China International Capital
Corporation Hong Kong Securities Limited and Huatai Financial Holdings (Hong
Kong) Limited, with respect to a subscription of H Shares at the Offer Price in the
aggregate amount of the Hong Kong dollar equivalent of US dollar 10,000,000;
(r) a cornerstone investment agreement dated December 29, 2025 entered into among
the Company, Greater Bay Area Development Fund Management Limited (for and
on behalf of the managed account of Mega Prime Development Limited), China
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-6 –


--- page 572 ---
International Capital Corporation Hong Kong Securities Limited and Huatai
Financial Holdings (Hong Kong) Limited, with respect to a subscription of H Shares
at the Offer Price in the aggregate amount of the Hong Kong dollar equivalent of US
dollar 10,000,000;
(s) a cornerstone investment agreement dated December 29, 2025 entered into among
the Company, Wind Sabre Fund SPC (acting on behalf of and for the account of
Wind Sabre Opportunities Fund SP), China International Capital Corporation Hong
Kong Securities Limited and Huatai Financial Holdings (Hong Kong) Limited, with
respect to a subscription of H Shares at the Offer Price in the aggregate amount of
the Hong Kong dollar equivalent of US dollar 5,000,000; and
(t) the Hong Kong Underwriting Agreement.
Intellectual Property
As of the Latest Practicable Date, the following intellectual property rights are material
to the Group’s business:
Trademarks
As of the Latest Practicable Date, the Group had registered the following trademarks
which are material to its business:
No. Trademark Class
Registered
Owner
Place of
Registration
Registration
Number Expiry Date
1. /H1118/H1118/H1118GigaDevice 9, 35, 42 The Company The European
Union
1743920 December 24,
2033
2. /H1118/H1118/H1118GigaDevice 9 The Company The United
States
6770373 June 28, 2032
3. /H1118/H1118/H1118GigaDevice 9 The Company Taiwan 02088856 October 1, 2030
4. /H1118/H1118/H1118GigaDevice 9, 35, 42 The Company Republic of
Korea
40-1676428 December 29,
2030
5. /H1118/H1118/H1118GigaDevice 9, 35, 42 The Company Japan 6342403 January 19, 2031
6. /H1118/H1118/H1118GigaDevice 9, 35, 42 The Company Hong Kong 305170734 January 15, 2030
7. /H1118/H1118/H1118GigaDevice 9, 35, 42 The Company The United
Kingdom
UK00003453906 August 7, 2030
8. /H1118/H1118/H1118GigaDevice 9, 35, 42 The Company Germany 30 2020 000 009 July 8, 2030
9. /H1118/H1118/H1118GigaDevice 9 The Company PRC 40507870 April 6, 2030
10. /H1118/H1118GigaDevice 9 The Company PRC 13452795 January 20, 2035
11. /H1118/H1118GigaDevice 9 The Company Taiwan 01689801 February 1, 2035
12. /H1118/H1118gigadevice 9 The Company PRC 8720220 October 13,
2031
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-7 –


--- page 573 ---
No. Trademark Class
Registered
Owner
Place of
Registration
Registration
Number Expiry Date
13. /H1118/H1118
 9 The Company PRC 71052704 March 6, 2035
14. /H1118/H1118
 9 The Company PRC 62873480 May 13, 2033
15. /H1118/H1118
 9 The Company The United
States
7012829 March 28, 2033
16. /H1118/H1118
 9 The Company Taiwan 02088854 October 1, 2030
17. /H1118/H1118
 9, 35, 42 The Company Republic of
Korea
40-1699638 March 4, 2031
18. /H1118/H1118
 9, 35, 42 The Company Japan 6342405 January 19, 2031
19. /H1118/H1118
 9, 35, 42 The Company Hong Kong 305170743 January 15, 2030
20. /H1118/H1118
 9, 35, 42 The Company The United
Kingdom
UK00003453909 August 7, 2030
21. /H1118/H1118
 9, 35, 42 The Company Germany 30 2020 000 010 July 6, 2030
22. /H1118/H1118
 9 The Company PRC 40510934 September 13,
2031
23. /H1118/H1118
 9, 35, 42 The Company Singapore 40202255438Y September 28,
2032
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-8 –


--- page 574 ---
No. Trademark Class
Registered
Owner
Place of
Registration
Registration
Number Expiry Date
24. /H1118/H1118
 9, 35, 42 The Company The European
Union
018769962 September 29,
2032
25. /H1118/H1118
 9 The Company The United
States
7012828 March 28, 2033
26. /H1118/H1118
 9 The Company Taiwan 02088855 October 1, 2030
27. /H1118/H1118
 9, 35, 42 The Company Republic of
Korea
40-1699637 March 4, 2031
28. /H1118/H1118
 9, 35, 42 The Company Japan 6342404 January 19, 2031
29. /H1118/H1118
 9, 35, 42 The Company Hong Kong 305170725 January 15, 2030
30. /H1118/H1118
 9, 35, 42 The Company The United
Kingdom
UK00003460178 August 7, 2030
31. /H1118/H1118
 9, 35, 42 The Company Germany 30 2020 000 008 July 8, 2030
32. /H1118/H1118
 9 The Company PRC 40520244 September 13,
2031
33. /H1118/H1118׸9, 42 The Company Hong Kong 306070842 September 27,
2032
34. /H1118/H1118׸9, 42 The Company Singapore 1730568 February 19,
2033
35. /H1118/H1118׸9, 42 The Company Japan 1730568 February 19,
2033
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-9 –


--- page 575 ---
No. Trademark Class
Registered
Owner
Place of
Registration
Registration
Number Expiry Date
36. /H1118/H1118׸9, 42 The Company The United
Kingdom
1730568 February 20,
2033
37. /H1118/H1118׸9, 42 The Company The European
Union
1730568 February 20,
2033
38. /H1118/H1118׸9 The Company PRC 9682514 August 27, 2032
39. /H1118/H1118׸9 The Company Taiwan 01639781 April 30, 2034
40. /H1118/H1118௴อ 9 The Company PRC 40515478 April 6, 2030
41. /H1118/H1118௴อ 9 The Company PRC 9682626 August 27, 2032
42. /H1118/H1118௴อ 9 The Company Taiwan 01639782 April 30, 2034
Domain Name
As of the Latest Practicable Date, the Group had registered the following domain name
which is material to its business:
No. Domain Name Registered Owner Expiry Date
1. /H1118/H1118www.gigadevice.com The Company March 15, 2028
Patents
As of the Latest Practicable Date, the Group had registered the following patents which
are material to its business:
No Patent Name Type
Patent
Holder
Jurisdiction
of
Registration Patent Number
Date of
Application Expiry Date
1. /H1118/H1118/H1118A controllable integrated
circuit test system and
method based on
programmable devices
(ٙ
̙છණϓཥ༩಻༊ӻ୕ʿ
ج)
Invention The Company PRC CN200710062951.1 January 23,
2007
January 23,
2027
2. /H1118/H1118/H1118Apparatus and method for
single-port memory to
achieve multi-port
storage function ( ఊ၌ɹ
πᎷኜྼତε၌ɹπᎷ̌
ج)
Invention The Company PRC CN200710063455.8 February 1,
2007
February 1,
2027
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-10 –


--- page 576 ---
No Patent Name Type
Patent
Holder
Jurisdiction
of
Registration Patent Number
Date of
Application Expiry Date
3. /H1118/H1118/H1118A memory irradiation test
method and a device for
implementing the
method ( ɓ၇πᎷኜ፧๫
ج
ༀໄ)
Invention The Company PRC CN200710064298.2 March 9, 2007 March 9, 2027
4. /H1118/H1118/H1118A memory error detection
and correction coding
circuit and a method of
reading and writing data
using it ( ɓ၇πᎷኜᏨ
፹ᇜᇁཥ༩ʿл͜Չ
ج)
Invention The Company PRC CN200710098602.5 April 23, 2007 April 23, 2027
5. /H1118/H1118/H1118A semiconductor memory
device and its
manufacturing method
(ɓ၇̒ኬ᜗πᎷኜ΁ʿ
ج)
Invention The Company PRC CN200710100298.3 June 7, 2007 June 7, 2027
6. /H1118/H1118/H1118A programmable non-
volatile memory cell
structure and its
manufacturing method
(π
Ꮇఊʩഐ࿴ʿՉႡி˙
ج)
Invention The Company PRC CN200710177121.3 November 9,
2007
November 9,
2027
7. /H1118/H1118/H1118An oscillator and its
design method (ࣈ
ج)
Invention The Company PRC CN200710178885.4 December 6,
2007
December 6,
2027
8. /H1118/H1118/H1118Disposable programmable
non-volatile memory
cell, array and their
manufacturing method
(׌
πᎷኜఊʩe৬ΐʿՉႡ
ج)
Invention The Company PRC CN200710179341.X December 12,
2007
December 12,
2027
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-11 –


--- page 577 ---
No Patent Name Type
Patent
Holder
Jurisdiction
of
Registration Patent Number
Date of
Application Expiry Date
9. /H1118/H1118/H1118A programmable non-
volatile memory cell,
array and their
manufacturing method
(π
Ꮇኜఊʩe৬ΐʿՉႡி
ج)
Invention The Company PRC CN200710196807.7 December 5,
2007
December 5,
2027
10. /H1118/H1118Multi-bit programmable
non-volatile memory
cell, array and their
manufacturing method
(׌
πᎷኜఊʩe৬ΐʿՉႡ
ج)
Invention The Company PRC CN200710308407.0 December 29,
2007
December 29,
2027
11. /H1118/H1118A binary domain multiplier
(ኜ)
Invention The Company PRC CN200810055758.X January 8,
2008
January 8,
2028
12. /H1118/H1118An oscillator (ጺኜ) Invention The Company PRC CN200810057906.1 February 20,
2008
February 20,
2028
13. /H1118/H1118A serial interface flash
memory and its design
method ( ɓ၇ЕБટɹҞ
ج)
Invention The Company PRC CN200810100925.8 February 26,
2008
February 26,
2028
14. /H1118/H1118A sensitive amplifier for
random memories ( ɓ၇
ᜳઽ
ɽኜ)
Invention The Company PRC CN200810104028.4 April 14, 2008 April 14, 2028
15. /H1118/H1118A random memory and its
power supply method
(ɓ၇ᎇዚπᎷኜʿՉԶ
ج)
Invention The Company PRC CN200810118470.2 August 25,
2008
August 25,
2028
16. /H1118/H1118A non-volatile memory and
its data protection
method (π
ج)
Invention The Company PRC CN200810118471.7 August 25,
2008
August 25,
2028
17. /H1118/H1118Disposable programmable
memory, its method of
manufacturing and
program reading (׌
̙ᇜ೻πᎷኜeႡிʿᇜ
ج)
Invention The Company PRC CN200810239925.6 December 15,
2008
December 15,
2028
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-12 –


--- page 578 ---
No Patent Name Type
Patent
Holder
Jurisdiction
of
Registration Patent Number
Date of
Application Expiry Date
18. /H1118/H1118Disposable programmable
memory, its method of
manufacturing and
program reading (׌
̙ᇜ೻πᎷኜeႡிʿᇜ
ج)
Invention The Company PRC CN200810239926.0 December 15,
2008
December 15,
2028
19. /H1118/H1118Disposable programmable
memory, its method of
manufacturing and
program reading (׌
̙ᇜ೻πᎷኜeႡிʿᇜ
ج)
Invention The Company PRC CN200810239927.5 December 15,
2008
December 15,
2028
20. /H1118/H1118Disposable programmable
memory, its method of
manufacturing and
program reading (׌
̙ᇜ೻πᎷኜeႡிʿᇜ
ج)
Invention The Company PRC CN200810240174.X December 18,
2008
December 18,
2028
21. /H1118/H1118Adjustable-frequency
oscillator capable of
preventing the frequency
from oscillating in the
vicinity of the reference
electrical signal ( ঐ੄ԣ
ڐڝ
ጺኜ)
Invention The Company PRC CN200810241012.8 December 24,
2008
December 24,
2028
22. /H1118/H1118System and method for
ensuring secure reading
of data stored in a
memory (ᗇπᎷኜπ
ӻ୕
ج)
Invention The Company PRC CN200910081928.6 April 8, 2009 April 8, 2029
23. /H1118/H1118Disposable programmable
memory, its method of
manufacturing and
program reading (׌
̙ᇜ೻πᎷኜeႡிʿᇜ
ج)
Invention The Company PRC CN200910086520.8 June 4, 2009 June 4, 2029
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-13 –


--- page 579 ---
No Patent Name Type
Patent
Holder
Jurisdiction
of
Registration Patent Number
Date of
Application Expiry Date
24. /H1118/H1118Disposable programmable
memory, its method of
manufacturing and
program reading (׌
̙ᇜ೻πᎷኜeႡிʿᇜ
ج)
Invention The Company PRC CN200910086521.2 June 4, 2009 June 4, 2029
25. /H1118/H1118Disposable programmable
memory, its method of
manufacturing and
program reading (׌
̙ᇜ೻πᎷኜeႡிʿᇜ
ج)
Invention The Company PRC CN200910086522.7 June 4, 2009 June 4, 2029
26. /H1118/H1118Pseudo-static memory and
its control method for
write and refresh
operations ( ৽᎑࿒πᎷ
ኜʿՉᄳ዁ЪၾՏอ዁Ъ
ج)
Invention The Company PRC CN200910093836.X September 23,
2009
September 23,
2029
27. /H1118/H1118Pseudo-static memory and
its control method for
write and refresh
operations ( ৽᎑࿒πᎷ
ኜʿՉᄳ዁ЪၾՏอ዁Ъ
ج)
Invention The Company PRC CN200910093837.4 September 23,
2009
September 23,
2029
28. /H1118/H1118A non-volatile memory and
its design method ( ɓ၇
ࠇ
ج)
Invention The Company PRC CN201010105324.3 May 30, 2007 May 30, 2027
29. /H1118/H1118A chip test method and
device (˪಻༊˙
ձༀໄ)
Invention The Company PRC CN201310320070.0 July 26, 2013 July 26, 2033
30. /H1118/H1118A method and device for
signal management of a
digital-analogue hybrid
chip (˪
ձༀໄ)
Invention The Company PRC CN201310320077.2 July 26, 2013 July 26, 2033
31. /H1118/H1118A method of repairing a
non-volatile memory ( ɓ
ూ
ج)
Invention The Company PRC CN201310616204.3 November 27,
2013
November 27,
2033
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-14 –


--- page 580 ---
No Patent Name Type
Patent
Holder
Jurisdiction
of
Registration Patent Number
Date of
Application Expiry Date
32. /H1118/H1118A sensitive amplifier and
flash memory storage
device (ɽኜ
ձ৪ππᎷༀໄ)
Invention The Company PRC CN201410197238.8 May 12, 2014 May 12, 2034
33. /H1118/H1118A pre-charging system for
a memory median line
and a judgement method
of pre-charging ( ɓ၇π
ཫ̂ཥӻ୕
ج)
Invention The Company PRC CN201410198056.2 May 12, 2014 May 12, 2034
34. /H1118/H1118A dynamic pre-charging
control circuit and flash
memory storage system
(ɓ၇ਗ࿒ཫ̂છՓཥ༩
ձ৪ππᎷӻ୕)
Invention The Company PRC CN201410199017.4 May 12, 2014 May 12, 2034
35. /H1118/H1118A method to simulate user
data storage in
NandFlash ( ɓ၇
NandFlash ʕᅼᏝ͜˒ᅰ
ج)
Invention The Company PRC CN201510496655.7 August 13,
2015
August 13,
2035
36. /H1118/H1118An analogue test
development platform
for embedded memory
(ᅼ
Ꮭ಻༊ක೯̨̻)
Invention The Company PRC CN201510496664.6 August 13,
2015
August 13,
2035
37. /H1118/H1118A voltage conversion
circuit ( ɓ၇ཥᏀᔷ౬ཥ
༩)
Invention The Company PRC CN201510523098.3 August 24,
2015
August 24,
2035
38. /H1118/H1118A voltage conversion
circuit ( ɓ၇ཥᏀᔷ౬ཥ
༩)
Invention The Company PRC CN201510523953.0 August 24,
2015
August 24,
2035
39. /H1118/H1118Fingerprint sensing device
(७ช಻ண௪)
Invention Silead PRC CN201610304310.1 May 10, 2016 May 10, 2036
40. /H1118/H1118A data reading device and
method for non-volatile
memory (׌
ᅰኽᛘ՟ༀໄʿ
ج)
Invention The Company PRC CN201610574374.3 July 19, 2016 July 19, 2036
41. /H1118/H1118A driver circuit and charge
pump circuit ( ɓ၇ᚨਗ
ཥ༩)
Invention The Company
and
GigaDevice
Hefei
PRC CN201610877896.0 September 30,
2016
September 30,
2036
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-15 –


--- page 581 ---
No Patent Name Type
Patent
Holder
Jurisdiction
of
Registration Patent Number
Date of
Application Expiry Date
42. /H1118/H1118An EMMC test method
and device ( ɓ၇EMMC
ʿༀໄ)
Invention GigaDevice
Xi’an and
the
Company
PRC CN201611159207.9 December 15,
2016
December 15,
2036
43. /H1118/H1118An eMMC test method and
device ( ɓ၇eMMC ಻༊
ʿༀໄ)
Invention The Company PRC CN201611160426.9 December 15,
2016
December 15,
2036
44. /H1118/H1118A charge pump circuit ( ɓ
ཥ༩)
Invention The Company
and
GigaDevice
Hefei
PRC CN201611184799.X December 20,
2016
December 20,
2036
45. /H1118/H1118A Nand flash element and
its operation control
method and device ( ɓ၇
Nand flash ʩ΁ʿՉ༶Б
ձༀໄ)
Invention The Company PRC CN201711449641.5 December 27,
2017
December 27,
2037
46. /H1118/H1118A Nand flash element and
its low frame control
method and device ( ɓ၇
Nand flashࣸ
ձༀໄ)
Invention GigaDevice
Xi’an and
the
Company
PRC CN201711449645.3 December 27,
2017
December 27,
2037
47. /H1118/H1118A charging acceleration
unit, charging circuit
and non-volatile memory
(ɓ၇̂ཥ̋஺ఊʩê
̰πᎷኜ)
Invention The Company
and
GigaDevice
Hefei
PRC CN201811521172.8 December 12,
2018
December 12,
2038
48. /H1118/H1118Biometric identification
module, preparation
method and electronic
device (तᅄᗆйᅼ
ʿཥɿண
௪)
Invention Silead PRC CN201910411708.9 May 17, 2019 May 17, 2039
49. /H1118/H1118Charge pump circuit, non-
volatile memory (ݿ
πᎷኜ)
Invention The Company PRC CN202110031981.6 January 11,
2021
January 11,
2041
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-16 –


--- page 582 ---
DISCLOSURE OF INTERESTS
Disclosure of Interests of Directors and Chief Executive of the Company
Immediately following the completion of the Global Offering (assuming the Offer Size
Adjustment Option and the Over-allotment Option are not exercised and no additional Shares
are issued pursuant to the Share Incentive Plans), the interests and/or short positions (as
applicable) of the Directors and the chief executive of the Company in the Shares, underlying
Shares and debentures of the Company and any interests and/or short positions (as applicable)
in shares, underlying shares or debentures of any of the associated corporations of the
Company (within the meaning of Part XV of the SFO) which (1) will have to be notified to the
Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO
(including interests and/or short positions (as applicable) which they are taken or deemed to
have under such provisions of the SFO), (2) will be required, pursuant to Section 352 of the
SFO, to be entered in the register referred to therein or (3) will be required, pursuant to the
Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix
C3 to the Listing Rules, to be notified to the Company and the Stock Exchange, in each case
once the H Shares are listed on the Stock Exchange, will be as follows:
(i) Interests in the Company
Name of Director or
chief executive Nature of interest
Number and
description of
Shares or
underlying
Shares held
Shareholding in
A Shares upon
completion of the
Global Offering (1)
Shareholding in
total issued share
capital upon
completion of the
Global Offering (1)
Mr. Zhu Yiming (2) /H1118/H1118/H1118/H1118Beneficial owner
Interest held jointly
with other persons
58,811,513
A Shares
8.81% 8.44%
Mr. He Wei (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial owner 344,727
A Shares
0.05% 0.05%
Mr. Hu Hong (4) /H1118/H1118/H1118/H1118/H1118/H1118Beneficial owner 1,568,725
A Shares
0.23% 0.23%
Notes:
(1) The calculation is based on the total number of 696,765,151 Shares in issue immediately following the
completion of the Global Offering (assuming the Offer Size Adjustment Option and the Over-allotment
Option are not exercised and no additional Shares are issued pursuant to the Share Incentive Plans).
(2) InfoGrid Limited has issued the Acting-in-Concert Undertaking. By virtue of the SFO, Mr. Zhu Yiming
and InfoGrid Limited are deemed to be interested in the Shares held by each other.
(3) As of the Latest Practicable Date, Mr. He Wei was interested in (i) 255,207 A Shares held by him; and
(ii) 89,520 options granted to him under the 2024 Stock Option Incentive Plan entitling him to receive
89,520 A Shares subject to vesting.
(4) As of the Latest Practicable Date, Mr. Hu Hong was interested in (i) 425,845 A Shares held by him; and
(ii) 1,142,880 options granted to him under the 2024 Stock Option Incentive Plan entitling him to
receive 1,142,880 A Shares subject to vesting.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-17 –


--- page 583 ---
(ii) Interests in the associated corporations of the Company
Name of Director or
chief executive
Name of associated
corporation Nature of interest Shareholding
Mr. Hu Hong (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118CreMemory Technology Interest in controlled
corporations
22.22%
Note:
(1) Please see “History and Corporate Structure — Corporate Structure” for details of the shareholding
structure of CreMemory Technology as of the Latest Practicable Date.
Save as disclosed above, so far as the Directors are aware, immediately following the
completion of the Global Offering, no Directors or the chief executive will, directly or
indirectly, be interested in the Shares, underlying Shares and debentures of the Company or the
shares, underlying shares or debentures of any of the associated corporations of the Company.
Disclosure of Interests of Substantial Shareholders
(i) Interests in the Company
Save as disclosed in “Substantial Shareholders” in this prospectus and “— Disclosure of
Interests of Directors and Chief Executive of the Company — (i) Interests in the Company” in
this section, the Directors are not aware of any person who will have an interest or a short
position in the Shares or underlying Shares of the Company which would fall to be disclosed
to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.
(ii) Interests in other members of the Group
The following table sets out, so far as the Directors are aware, persons who will be,
directly or indirectly, interested in 10% or more of the issued voting shares of any other
members of the Group:
Member of the Group
Name of substantial
shareholder
Approximate percentage of
the issued voting shares
held by the substantial
shareholder
Xysemi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Hefei Guojing (1) 18.07%
Jian Tan ( ᗈ਄) 14.32%
Y anting Y ang (เዲణ) 12.13%
Stony Creek Capital (1) 12.05%
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-18 –


--- page 584 ---
Note:
(1) As of the Latest Practicable Date, Xysemi was held as to, among others, 38.07% by the Company,
18.07% by Hefei Guojing, 12.05% by Stony Creek Capital and 1.81% by Hefei Guozheng. Pursuant to
the Stony Creek Capital Undertaking, Stony Creek Capital has undertaken to entrust all of its
shareholder’s rights in Xysemi to the Company, including the voting rights and nomination and proposal
rights but other than the income rights and disposal rights. Pursuant to the Xysemi Acting-in-Concert
Agreement and the relevant arrangements, Hefei Guojing and Hefei Guozheng have agreed to act in
concert with the Company when making proposals to or voting at the general meetings of Xysemi on
matters in relation to Xysemi. See “History and Corporate Structure — Acquisition, Merger and
Disposal” for details.
Save as disclosed above and in “— Disclosure of Interests of Directors and Chief
Executive of the Company — (ii) Interests in the associated corporations of the Company” in
this section, the Directors are not aware of any person who will be, directly or indirectly,
interested in 10% or more of the issued voting shares of any other members of the Group.
FURTHER INFORMATION ABOUT THE DIRECTORS
Particulars of the Service Contracts
Each of the Directors has entered into a service contract with the Company. The principal
particulars of these service contracts comprise (a) the term of the service; (b) termination
provisions; and (c) dispute resolution provision. The service contracts may be renewed in
accordance with the Articles of Association and the applicable laws, rules and regulations from
time to time.
Save as disclosed above, none of the Directors has or is proposed to have entered into any
service contract with any member of the Group (excluding contracts expiring or determinable
by any member of the Group within one year without payment of compensation other than
statutory compensation).
Remuneration of Directors
For details of the remuneration of Directors, see “Directors and Senior Management —
Remuneration” and Note 8 in “Appendix I — Accountants’ Report.”
Agency Fees or Commissions Received
The Underwriters will receive an underwriting commission in connection with the
Underwriting Agreements, as detailed in “Underwriting — Underwriting Arrangements and
Expenses — Commissions and Expenses.” Save in connection with the Underwriting
Agreements, no commissions, discounts, brokerages or other special terms have been granted
by the Group to any person (including the Directors, promoters and experts referred to in “—
Other Information — Qualifications and Consents of Experts” below) in connection with the
issue or sale of any capital or security of the Company or any member of the Group within the
two years immediately preceding the date of this prospectus.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-19 –


--- page 585 ---
Within the two years immediately preceding the date of this prospectus, no commission
has been paid or is payable for subscription, agreeing to subscribe, procuring subscription or
agreeing to procure subscription for any share in or debentures of the Company.
Personal Guarantees
The Directors have not provided personal guarantees in favour of lenders in connection
with banking facilities granted to the Group.
Disclaimers
(a) None of the Directors nor any of the experts referred to in “— Other Information —
Qualifications and Consents of Experts” below has any direct or indirect interest in the
promotion of, or in any assets which have been, within the two years immediately
preceding the date of this prospectus, acquired or disposed of by, or leased to, any
member of the Group, or are proposed to be acquired or disposed of by, or leased to, any
member of the Group.
(b) Save in connection with the Underwriting Agreements, none of the Directors nor any of
the experts referred to in “— Other Information — Qualifications and Consents of
Experts” below, is materially interested in any contract or arrangement subsisting at the
date of this prospectus which is significant in relation to the business of the Group.
(c) Save as disclosed in this prospectus, none of the Directors is interested in any business
apart from the Group’s business which competes or is likely to compete, directly or
indirectly, with the business of the Group.
(d) No cash, securities or other benefit has been paid, allotted or given within the two years
preceding the date of this prospectus to any promoter of the Company nor is any such
cash, securities or benefit intended to be paid, allotted or given on the basis of the Global
Offering or related transactions as mentioned.
SHARE INCENTIVE PLANS
The following is a summary of the principal terms of the Share Incentive Plans
comprising the 2020 Stock Option Incentive Plan, the 2021 Stock Option Incentive Plan, the
2021 Restrict Share Incentive Plan, the 2023 Stock Option Incentive Plan and the 2024 Stock
Option Incentive Plan. The Share Incentive Plans do not involve any grant of options or
restricted Shares by the Company after Listing. Accordingly, the terms of the Share Incentive
Plans are not subject to the provisions of Chapter 17 of the Listing Rules. Save as otherwise
disclosed, the terms of each of the Share Incentive Plans are substantially similar and are
summarized below.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-20 –


--- page 586 ---
(a) Purpose
The purpose of the Share Incentive Plans is to improve the Company’s incentive
mechanism, to attract and retain talents and to mobilise the enthusiasm of the Company’s
Directors (where applicable), senior management (where applicable), management and core
and backbone personnel, so as to achieve a mutual focus on the long-term development of the
Company. The Share Incentive Plans are implemented to align the interests of the Shareholders
with the interests of the Company and the individuals of its core teams.
(b) Administration
The Share Incentive Plans are subject to the approval of the Shareholders’ meeting, the
administration of the Board and the supervision of the board of supervisors (where applicable)
and independent Directors of the Company.
(c) Participants
The participants of the 2021 Restricted Share Incentive Plan include the senior
management, management and core and backbone personnel of the Company. The participants
of the 2020 Stock Option Incentive Plan, the 2021 Stock Option Incentive Plan and the 2023
Stock Option Incentive Plan include the management and core and backbone personnel of the
Company. The participants of the 2024 Stock Option Incentive Plan include the Directors,
senior management, management and core and backbone personnel of the Company.
The scope of participants of the Share Incentive Plans excludes the independent
Directors, supervisors, Shareholders or actual controllers who individually or collectively hold
more than 5% of the Shares and their spouse, parents and children.
(d) Source and Maximum Number of Options and Restricted Shares
The underlying Shares of the Share Incentive Plans are the A Shares issued by the
Company. The underlying Shares of the 2024 Stock Option Incentive Plan might also include
the A Shares repurchased by the Company from secondary market.
Each option granted represents the right to purchase one A Share within the exercise
period at the exercise price. The options are subject to a vesting period and will only be vested
upon fulfilling the vesting conditions stipulated. Each restricted Share granted represents the
right to receive one A Share at the grant price. The restricted Shares are subject to a lock-up
period and will only be unlocked upon fulfilling the unlocking conditions stipulated.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-21 –


--- page 587 ---
The maximum number of options or restricted Shares that can be granted under each of
the Share Incentive Plans is as follows:
Share Incentive Plan
Maximum
number of
options/restricted
Shares to be
granted
2020 Stock Option Incentive Plan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,408,600
2021 Stock Option Incentive Plan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,463,100
2021 Restricted Share Incentive Plan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,202,600
2023 Stock Option Incentive Plan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,813,400
2024 Stock Option Incentive Plan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,781,400
(e) Date of Grant and Term of the Share Incentive Plans
The date on which the options and restricted Shares are granted shall be determined by
the Board after the approval of the Share Incentive Plans by the Shareholders. The initial grant
of options and restricted Shares shall be announced within 60 days after the approval of such
plan by the Shareholders.
The Stock Option Incentive Plans shall be effective from the date of the completion of
registration of relevant options granted under the relevant Stock Option Incentive Plans up to
the date when all of the options granted under the relevant Stock Option Incentive Plans have
been vested or deregistered, provided that the term of the relevant Stock Option Incentive Plans
(other than 2020 Stock Option Incentive Plan) shall not exceed 60 months, and the terms of the
2020 Stock Option Incentive Plan shall not exceed 61 months.
The 2021 Restricted Share Incentive Plan shall be effective from the date of the
completion of registration of relevant restricted Shares granted under the 2021 Restricted Share
Incentive Plan up to the date when all of the restricted Shares granted under the 2021 Restricted
Share Incentive Plan have been unlocked or repurchased and deregistered, provided that its
term shall not exceed 60 months.
(f) Lock-up for Directors and Senior Management
If the grantee is a Director or a member of senior management of the Company,
(i) during their employment with the Company, the Shares to be transferred in each year
shall not exceed 25% of the total Shares he or she holds;
(ii) no Share held by such Director or senior management can be transferred within six
months after termination of his or her employment with the Company;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-22 –


--- page 588 ---
(iii) income gained through sale of the Shares within six months after his or her purchase
of the Shares or purchase of the Shares within six months after his or her sale of the
Shares shall belong to the Company and will be forfeited by the Board; and
(iv) if there is any change in the applicable laws and regulations on the foregoing
lock-up requirements, the grantee shall comply with the amended laws and
regulations.
(g) Conditions to the Grant of Options and Restricted Shares
The options and restricted Shares under the Share Incentive Plans will only be granted to
selected participants if the following conditions are fulfilled:
(i) with respect to the Company, none of the following circumstances having occurred:
(1) an audit report with an adverse opinion or a disclaimer of opinion has been
issued by the reporting accountants with respect to the Company’s
accountants’ report for the most recent fiscal year;
(2) an audit report with an adverse opinion or a disclaimer of opinion has been
issued by the reporting accountants with respect to the internal control of the
financial report for the most recent fiscal year;
(3) the Company has not distributed dividends in accordance with the laws and
regulations, the Articles of Association or the Company’s public commitment
within the last 36 months after its listing;
(4) applicable laws and regulations prohibit the implementation of share incentive;
or
(5) other circumstances determined by the CSRC; and
(ii) with respect to a grantee, none of the following circumstances having occurred:
(1) the grantee has been regarded as an inappropriate person by the stock exchange
within the last 12 months;
(2) the grantee has been regarded as an inappropriate person by the CSRC and its
local office within the last 12 months;
(3) the grantee has received administrative penalty or been prohibited from
entering into the securities market by the CSRC and its local office due to
material non-compliance with applicable laws and regulations within the last
12 months;
(4) the grantee is not qualified to serve as a director or senior management
according to the PRC Company Law;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-23 –


--- page 589 ---
(5) the grantee is prohibited from participating in any share incentive of listed
companies according to applicable laws and regulations; or
(6) other circumstances determined by the CSRC.
(h) Vesting of Options
The options will only be vested when the conditions set out under paragraph (g) above are
fulfilled and the annual assessment and performance targets as set out under the respective
relevant Stock Option Incentive Plans are achieved.
The options will be vested in accordance with the vesting schedule as set out under the
relevant Stock Option Incentive Plans as follows:
(i) under the 2020 Stock Option Incentive Plan, vested in tranches of 25% in each of
the four vesting periods that occur between (i) the first trading date after 13 months
from the date of registration and the last trading day up to 25 months from the date
of registration, (ii) the first trading date after 25 months from the date of registration
and the last trading day up to 37 months from the date of registration, (iii) the first
trading date after 37 months from the date of registration and the last trading day up
to 49 months from the date of registration, and (iv) the first trading date after 49
months from the date of registration and the last trading day up to 61 months from
the date of registration, respectively;
(ii) under the 2021 Stock Option Incentive Plan and the 2023 Stock Option Incentive
Plan, vested in tranches of 25% in each of the four vesting periods that occur
between (i) the first trading date after 12 months from the date of registration and
the last trading day up to 24 months from the date of registration, (ii) the first trading
date after 24 months from the date of registration and the last trading day up to 36
months from the date of registration, (iii) the first trading date after 36 months from
the date of registration and the last trading day up to 48 months from the date of
registration, and (iv) the first trading date after 48 months from the date of
registration and the last trading day up to 60 months from the date of registration,
respectively; and
(iii) under the 2024 Stock Option Incentive Plan, vested in tranches of 20%, 20%, 30%
and 30% in each of the four vesting periods that occur between (i) the first trading
date after 12 months from the date of registration and the last trading day up to 24
months from the date of registration, (ii) the first trading date after 24 months from
the date of registration and the last trading day up to 36 months from the date of
registration, (iii) the first trading date after 36 months from the date of registration
and the last trading day up to 48 months from the date of registration, and (iv) the
first trading date after 48 months from the date of registration and the last trading
day up to 60 months from the date of registration, respectively.
The number of options granted and/or vested and/or the vesting prices shall be adjusted
upon the occurrence of certain events, including increase in the share capital by way of
capitalization of capital reserves, distribution of dividends, subdivision of shares, placing and
share reduction. The Company may deregister the granted but unvested options upon
occurrence of certain events as set out in the relevant Stock Option Incentive Plans, including
but not limited to the termination of employment of the grantees with the Company.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-24 –


--- page 590 ---
(i) Unlocking of Restricted Shares
The restricted Shares will only be unlocked when the conditions set out under paragraph
(g) above are fulfilled and the annual assessment and performance targets as set out under the
2021 Restricted Share Incentive Plan are achieved.
Under the 2021 Restricted Share Incentive Plan, the restricted Shares will be unlocked in
tranches of 25% in each of the four unlocking periods that occur between (i) the first trading
date after 12 months from the date of registration and the last trading day up to 24 months from
the date of registration, (ii) the first trading date after 24 months from the date of registration
and the last trading day up to 36 months from the date of registration, (iii) the first trading date
after 36 months from the date of registration and the last trading day up to 48 months from the
date of registration, and (iv) the first trading date after 48 months from the date of registration
and the last trading day up to 60 months from the date of registration, respectively.
The number of restricted Shares granted and/or unlocked and/or the grant prices shall be
adjusted upon the occurrence of certain events, including increase in the share capital by way
of capitalization of capital reserves, distribution of dividends, subdivision of shares, placing
and share reduction. The Company may repurchase and deregister the granted and locked
restricted Shares upon occurrence of certain events as set out in the 2021 Restricted Share
Incentive Plan, including but not limited to the termination of employment of the grantees with
the Company.
(j) Outstanding Options
As of the Latest Practicable Date, the number of A Shares underlying the outstanding
options granted under the Stock Option Incentive Plans as resolved by the Board was
10,337,809, representing approximately 1.48% of the total issued Shares immediately
following completion of the Global Offering (assuming the Offer Size Adjustment Option and
the Over-allotment Option are not exercised and no additional Shares are issued pursuant to the
Share Incentive Plans). Assuming full vesting of all outstanding options granted under the
Stock Option Incentive Plans, the shareholding of the Shareholders and the earning per Share
immediately following completion of the Global Offering will be diluted by approximately
1.46% (assuming (i) the underlying A Shares of all outstanding options are A Shares issued by
the Company, instead of repurchased from secondary market and (ii) the Offer Size Adjustment
Option and the Over-allotment Option are not exercised). All outstanding options were granted
at nil consideration. The following table sets forth details of outstanding options granted to the
Directors, senior management, other connected persons and other employees of the Company
under the Stock Option Incentive Plans as of the Latest Practicable Date:
Name
Position in
the Group Address
Stock
Option
Incentive
Plan
Date of
registration
Exercise/
Vesting
period
Exercise price
(per Share)
Number of
A Shares
underlying
the
outstanding
options
As an
approximate
percentage
of total
issued share
capital upon
completion
of the
Global
Offering (1)
Directors and senior management
Mr. He Wei /H1118Executive Director,
deputy chairman
of the Board and
general manager
Room 1201,
Building 1, 2
Siyingmen
North Road,
Fengtai District,
Beijing, PRC
2024 Stock
Option
Incentive
Plan
June 3,
2024
Note 2 RMB58.84
(4) 89,520 0.01%
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-25 –


--- page 591 ---
Name
Position in
the Group Address
Stock
Option
Incentive
Plan
Date of
registration
Exercise/
Vesting
period
Exercise price
(per Share)
Number of
A Shares
underlying
the
outstanding
options
As an
approximate
percentage
of total
issued share
capital upon
completion
of the
Global
Offering (1)
Mr. Hu Hong /H1118Executive Director
and deputy
general manager
1104, West Unit,
Building 16,
16 Zhixin Beili,
Haidian District,
Beijing, PRC
2024 Stock
Option
Incentive
Plan
June 3,
2024
Note 2 RMB58.84
(4) 1,142,880 0.16%
Ms. Sun
Guijing /H1118/H1118
Deputy general
manager and
chief financial
officer
2003, 20/F,
Building 16,
Fulaiyin Garden
76 Shazikou
Road,
Dongcheng
District, Beijing,
PRC
2024 Stock
Option
Incentive
Plan
June 3,
2024
Note 2 RMB58.84
(4) 268,560 0.04%
Mr. Li
Baokui /H1118/H1118/H1118
Deputy general
manager
401, Unit 5,
Building 12,
Huilongguan
Xinlongcheng,
Changping
District,
Beijing, PRC
2020 Stock
Option
Incentive
Plan
February
23,
2021
Note 3 RMB141.73
(5) 19,600 0.003%
2024 Stock
Option
Incentive
Plan
June 3,
2024
Note 2 RMB58.84
(4) 375,040 0.05%
Other connected persons
Ms. Li Hong
(ߎ)H1118/H1118/H1118
Director of Silead Room 202, No. 40,
39 Xiangnan
Road, Zhangjiang
Town, Pudong
New District,
Shanghai, PRC
2024 Stock
Option
Incentive
Plan
June 3,
2024
Note 2 RMB58.84
(4) 375,040 0.05%
Ms. Li
Xiaoyan
(ҽወዲ) /H1118/H1118
Supervisor of
GigaDevice
Hefei, Silead and
GigaDevice
Shanghai
Room 1402, Unit 1,
Building 39,
Phase III,
Zhonghai Runze
Garden, Runzhou
District,
Zhenjiang,
Jiangsu Province,
PRC
2024 Stock
Option
Incentive
Plan
June 3,
2024
Note 2 RMB58.84
(4) 268,560 0.04%
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-26 –


--- page 592 ---
Name
Position in
the Group Address
Stock
Option
Incentive
Plan
Date of
registration
Exercise/
Vesting
period
Exercise price
(per Share)
Number of
A Shares
underlying
the
outstanding
options
As an
approximate
percentage
of total
issued share
capital upon
completion
of the
Global
Offering (1)
Other grantees who have been granted options to subscribe for an aggregate number of 89,520 or more A Shares
Li Desheng
(ҽᅃ௷) /H1118/H1118
Department head 601, Unit 6,
Building 26,
Y uanyang
Shanshui South
Block,
Shijingshan
District, Beijing,
PRC
2024 Stock
Option
Incentive
Plan
June 3,
2024
Note 2 RMB58.84
(4) 375,040 0.05%
Su Ruwei
(ᘽνਃ) /H1118/H1118
Department head 202, Unit 1, 19
Y ongding Road,
Haidian District,
Beijing, PRC
2024 Stock
Option
Incentive
Plan
June 3,
2024
Note 2 RMB58.84
(4) 343,120 0.05%
Jun Zhi /H1118/H1118/H1118/H1118Department head Room 506, No. 51,
Tangchen
Haoyuan Phase
II, 825 Chenhui
Road, Zhangjiang
Town, Pudong
New Area,
Shanghai, PRC
2024 Stock
Option
Incentive
Plan
June 3,
2024
Note 2 RMB58.84
(4) 322,240 0.05%
Chen Y ongbo
(ت)H1118/H1118
Department head A201, Xianghui
Y ayuan, Xiangmi
Lake, Futian
District,
Shenzhen,
Guandong
Province, PRC
2024 Stock
Option
Incentive
Plan
June 3,
2024
Note 2 RMB58.84
(4) 322,240 0.05%
Han Fei
(࠭)H1118/H1118/H1118
Department head 1410, Building 8,
Niujie Xierli,
Xicheng District,
Beijing, PRC
2024 Stock
Option
Incentive
Plan
June 3,
2024
Note 2 RMB58.84
(4) 322,240 0.05%
Y ang Xinmin
(เอ͏) /H1118/H1118
Department head 1702, Building 25,
Renheng Haihe
Y unting, 588
Gangtian Road,
Suzhou Industrial
Park, Jiangsu
Province, PRC
2024 Stock
Option
Incentive
Plan
June 3,
2024
Note 2 RMB58.84
(4) 322,240 0.05%
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-27 –


--- page 593 ---
Name
Position in
the Group Address
Stock
Option
Incentive
Plan
Date of
registration
Exercise/
Vesting
period
Exercise price
(per Share)
Number of
A Shares
underlying
the
outstanding
options
As an
approximate
percentage
of total
issued share
capital upon
completion
of the
Global
Offering (1)
Y u Dali
(ɽͭ) /H1118/H1118
Department head No. 43, 168
Qingtong Road,
Pudong New
Area, Shanghai,
PRC
2024 Stock
Option
Incentive
Plan
June 3,
2024
Note 2 RMB58.84
(4) 149,200 0.02%
Ma Sibo
(௹) /H1118/H1118
Department senior
director
1-3-1701, Fenglin
Yishu, Keji Sixth
Road, Gaoxin
District, Xi’an,
Shaanxi Province,
PRC
2021 Stock
Option
Incentive
Plan
September
1, 2021
Note 6 RMB185.94
(7) 14,500 0.002%
2023 Stock
Option
Incentive
Plan
August
21,
2023
Note 6 RMB86.13
(4) 34,950 0.01%
2024 Stock
Option
Incentive
Plan
June 3,
2024
Note 2 RMB58.84
(4) 86,880 0.01%
Walid
Mekhael
Abou-
Haidar /H1118/H1118/H1118
Overseas sales
personnel
1228 Chamberlin
Court, Campbell,
CA 95008, U.S.
2023 Stock
Option
Incentive
Plan
August
21,
2023
Note 6 RMB86.13
(4) 99,750 0.01%
Chen Y oujia
(௓ʾᇄ) /H1118/H1118
Senior expert 49-202, 18
Qingtong Road,
Pudong New
Area, Shanghai,
PRC
2024 Stock
Option
Incentive
Plan
June 3,
2024
Note 2 RMB58.84
(4) 89,520 0.01%
Notes:
(1) The calculation is based on the assumption that the Offer Size Adjustment Option and the Over-allotment
Option are not exercised and no additional Shares are issued pursuant to the Share Incentive Plans.
(2) 20%, 20%, 30% and 30% options are vested in each of the four vesting periods that occur between (i) the first
trading date after 12 months from the date of registration and the last trading day up to 24 months from the
date of registration, (ii) the first trading date after 24 months from the date of registration and the last trading
day up to 36 months from the date of registration, (iii) the first trading date after 36 months from the date of
registration and the last trading day up to 48 months from the date of registration, and (iv) the first trading date
after 48 months from the date of registration and the last trading day up to 60 months from the date of
registration, respectively, under the 2024 Stock Option Incentive Plan.
(3) 25% options are vested in each of the four vesting periods that occur between the first trading date after (i)13
months from the date of registration and the last trading day up to 25 months from the date of registration, (ii)
the first trading date after 25 months from the date of registration and the last trading day up to 37 months from
the date of registration, (iii) the first trading date after 37 months from the date of registration and the last
trading day up to 49 months from the date of registration, and (iv) the first trading date after 49 months from
the date of registration and the last trading day up to 61 months from the date of registration, respectively,
under the 2020 Stock Option Incentive Plan.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-28 –


--- page 594 ---
(4) The exercise price under the 2023 Stock Option Incentive Plan and the 2024 Stock Option Incentive Plan has
taken into account the adjustment due to the Company’s distribution of cash dividends of RMB3.4 (tax
inclusive) per 10 Shares to the Company’s then existing Shareholders on July 3, 2025.
(5) The exercise price under the 2020 Stock Option Incentive Plan has taken into account the adjustment due to
the Company’s dividends distributions, including (i) the distribution of cash dividends of RMB5.6 (tax
inclusive) per 10 Shares and distribution of stock dividends of four Shares per 10 Shares to the Company’s then
existing Shareholders on May 21, 2021; (ii) the distribution of cash dividends of RMB10.6 (tax inclusive) per
10 Shares to the Company’s then existing Shareholders on June 2, 2022; (iii) the distribution of cash dividends
of RMB6.2 (tax inclusive) per 10 Shares to the Company’s then existing Shareholders on June 20, 2023; and
(iv) the distribution of cash dividends of RMB3.4 (tax inclusive) per 10 Shares to the Company’s then existing
Shareholders on July 3, 2025.
(6) 25% options are vested in each of the four vesting periods that occur between the first trading date after (i)
12 months from the date of registration and the last trading day up to 24 months from the date of registration,
(ii) the first trading date after 24 months from the date of registration and the last trading day up to 36 months
from the date of registration, (iii) the first trading date after 36 months from the date of registration and the
last trading day up to 48 months from the date of registration, and (iv) the first trading date after 48 months
from the date of registration and the last trading day up to 60 months from the date of registration, respectively,
under the 2021 Stock Option Incentive Plan and the 2023 Stock Option Incentive Plan.
(7) The exercise price under the 2021 Stock Option Incentive Plan has taken into account the adjustment due to
the Company’s dividends distributions, including (i) the distribution of cash dividends of RMB10.6 (tax
inclusive) per 10 Shares to the Company’s then existing Shareholders on June 2, 2022; (ii) the distribution of
cash dividends of RMB6.2 (tax inclusive) per 10 Shares to the Company’s then existing Shareholders on June
20, 2023; and (iii) the distribution of cash dividends of RMB3.4 (tax inclusive) per 10 Shares to the Company’s
then existing Shareholders on July 3, 2025.
The table below sets forth the details of outstanding options granted to other grantees
under the Stock Option Incentive Plans as of the Latest Practicable Date:
Range of A Shares
underlying the
outstanding options
Stock Option
Incentive Plan
Number of
grantees
(8) Date of registration
Exercise/
Vesting
period
Exercise price
(per Share)
Number of A
Shares
underlying the
outstanding
options
As an
approximate
percentage of
total issued
share capital
upon completion
of the Global
Offering (1)
1 to 5,000 /H1118/H1118/H1118/H1118/H1118/H11182020 Stock Option
Incentive Plan
8 February 23, 2021 Note 2 RMB141.73 (5) 12,234 0.002%
2021 Stock Option
Incentive Plan
14 September 1, 2021 Note 3 RMB185.94 (6) 25,810 0.004%
2023 Stock Option
Incentive Plan
616 August 21, 2023 Note 3 RMB86.13 (7) 1,812,564 0.26%
2024 Stock Option
Incentive Plan
6 June 3, 2024 Note 4 RMB58.84 (7) 24,320 0.003%
5,001 to 10,000 /H1118/H1118/H11182020 Stock Option
Incentive Plan
1 February 23, 2021 Note 2 RMB141.73 (5) 5,600 0.001%
2023 Stock Option
Incentive Plan
227 August 21, 2023 Note 3 RMB86.13 (7) 1,565,433 0.22%
2024 Stock Option
Incentive Plan
4 June 3, 2024 Note 4 RMB58.84 (7) 30,080 0.004%
10,001 to 20,000 /H1118/H11182021 Stock Option
Incentive Plan
1 September 1, 2021 Note 3 RMB185.94 (6) 10,500 0.002%
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-29 –


--- page 595 ---
Range of A Shares
underlying the
outstanding options
Stock Option
Incentive Plan
Number of
grantees
(8) Date of registration
Exercise/
Vesting
period
Exercise price
(per Share)
Number of A
Shares
underlying the
outstanding
options
As an
approximate
percentage of
total issued
share capital
upon completion
of the Global
Offering (1)
2023 Stock Option
Incentive Plan
63 August 21, 2023 Note 3 RMB86.13 (7) 851,800 0.12%
2024 Stock Option
Incentive Plan
9 June 3, 2024 Note 4 RMB58.84 (7) 124,960 0.02%
20,001 to 30,000 /H1118/H11182023 Stock Option
Incentive Plan
14 August 21, 2023 Note 3 RMB86.13 (7) 358,000 0.05%
2024 Stock Option
Incentive Plan
2 June 3, 2024 Note 4 RMB58.84 (7) 52,000 0.007%
30,001 to 89,519 /H1118/H11182023 Stock Option
Incentive Plan
9 August 21, 2023 Note 3 RMB86.13 (7) 321,148 0.05%
2024 Stock Option
Incentive Plan
3 June 3, 2024 Note 4 RMB58.84 (7) 122,240 0.02%
Notes:
(1) The calculation is based on the assumption that the Offer Size Adjustment Option and the
Over-allotment Option are not exercised and no additional Shares are issued pursuant to the Share
Incentive Plans.
(2) 25% options are vested in each of the four vesting periods that occur between (i) the first trading date
after 13 months from the date of registration and the last trading day up to 25 months from the date of
registration, (ii) the first trading date after 25 months from the date of registration and the last trading
day up to 37 months from the date of registration, (iii) the first trading date after 37 months from the
date of registration and the last trading day up to 49 months from the date of registration, and (iv) the
first trading date after 49 months from the date of registration and the last trading day up to 61 months
from the date of registration, respectively, under the 2020 Stock Option Incentive Plan.
(3) 25% options are vested in each of the four vesting periods that occur between (i) the first trading date
after 12 months from the date of registration and the last trading day up to 24 months from the date of
registration, (ii) the first trading date after 24 months from the date of registration and the last trading
day up to 36 months from the date of registration, (iii) the first trading date after 36 months from the
date of registration and the last trading day up to 48 months from the date of registration, and (iv) the
first trading date after 48 months from the date of registration and the last trading day up to 60 months
from the date of registration, respectively, under the 2021 Stock Option Incentive Plan and the 2023
Stock Option Incentive Plan.
(4) 20%, 20%, 30% and 30% options are vested in each of the four vesting periods that occur between (i)
the first trading date after 12 months from the date of registration and the last trading day up to 24
months from the date of registration, (ii) the first trading date after 24 months from the date of
registration and the last trading day up to 36 months from the date of registration, (iii) the first trading
date after 36 months from the date of registration and the last trading day up to 48 months from the date
of registration, and (iv) the first trading date after 48 months from the date of registration and the last
trading day up to 60 months from the date of registration, respectively, under the 2024 Stock Option
Incentive Plan.
(5) The exercise price under the 2020 Stock Option Incentive Plan has taken into account the adjustment
due to the Company’s dividends distributions, including (i) the distribution of cash dividends of
RMB5.6 (tax inclusive) per 10 Shares and distribution of stock dividends of four Shares per 10 Shares
to the Company’s then existing Shareholders on May 21, 2021; (ii) the distribution of cash dividends
of RMB10.6 (tax inclusive) per 10 Shares to the Company’s then existing Shareholders on June 2, 2022;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-30 –


--- page 596 ---
(iii) the distribution of cash dividends of RMB6.2 (tax inclusive) per 10 Shares to the Company’s then
existing Shareholders on June 20, 2023; and (iv) the distribution of cash dividends of RMB3.4 (tax
inclusive) per 10 Shares to the Company’s then existing Shareholders on July 3, 2025.
(6) The exercise price under the 2021 Stock Option Incentive Plan has taken into account the adjustment
due to the Company’s dividends distributions, including (i) the distribution of cash dividends of
RMB10.6 (tax inclusive) per 10 Shares to the Company’s then existing Shareholders on June 2, 2022;
(ii) the distribution of cash dividends of RMB6.2 (tax inclusive) per 10 Shares to the Company’s then
existing Shareholders on June 20, 2023; and (iii) the distribution of cash dividends of RMB3.4 (tax
inclusive) per 10 Shares to the Company’s then existing Shareholders on July 3, 2025.
(7) The exercise prices under the 2023 Stock Option Incentive Plan and the 2024 Stock Option Incentive
Plan have taken into account the adjustment due to the Company’s distribution of cash dividends of
RMB3.4 (tax inclusive) per 10 Shares to the Company’s then existing Shareholders on July 3, 2025.
(8) Certain grantees may have been granted options under more than one of the Stock Option Incentive
Plans. Accordingly, the aggregate number of grantees set forth in this table exceeds the number of
employees of the Group who have been granted options to subscribe for an aggregate of less than 89,520
A Shares under the Stock Option Incentive Plans.
(k) Outstanding Restricted Shares
As of the Latest Practicable Date, the number of outstanding restricted Shares granted
under the 2021 Restricted Share Incentive Plan as resolved by the Board was 4,565,
representing approximately 0.001% of the total issued Shares immediately following
completion of the Global Offering (assuming the Offer Size Adjustment Option and the
Over-allotment Option are not exercised and no additional Shares are issued pursuant to the
Share Incentive Plans). As of the Latest Practicable Date, none of the grantees under the 2021
Restricted Share Incentive Plan is a Director, member of senior management or connected
person of the Company. The table below sets forth the details of outstanding restricted Shares
granted under the 2021 Restricted Share Incentive Plan as of the Latest Practicable Date:
Restricted Share
Incentive Plan
Number of
grantees
Date of
registration
Unlocking
period
Grant price
(per Share)
Number of
outstanding
restricted
Shares
As an
approximate
percentage of
total issued share
capital upon
completion of the
Global Offering (1)
2021 Restricted Share
Incentive Plan /H1118/H1118/H1118/H1118
6 September 8,
2021
Note 2 RMB93.98 4,565 0.001%
Notes:
(1) The calculation is based on the assumption that the Offer Size Adjustment Option and the
Over-allotment Option are not exercised and no additional Shares are issued pursuant to the Share
Incentive Plans.
(2) 25% restricted Shares are unlocked in each of the four unlocking periods that occur between (i) the first
trading date after 12 months from the date of registration and the last trading day up to 24 months from
the date of registration, (ii) the first trading date after 24 months from the date of registration and the
last trading day up to 36 months from the date of registration, (iii) the first trading date after 36 months
from the date of registration and the last trading day up to 48 months from the date of registration, and
(iv) the first trading date after 48 months from the date of registration and the last trading day up to 60
months from the date of registration, respectively, under the 2021 Restricted Share Incentive Plan.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-31 –


--- page 597 ---
OTHER INFORMATION
Estate Duty
The Directors have been advised that no material liability for estate duty is likely to fall
on the Group.
Litigation
As of the Latest Practicable Date, the Company was not engaged in any outstanding
litigation or arbitration which may have material adverse effect on the Global Offering and, so
far as the Directors are aware, no material litigation or claim was pending or threatened by or
against the Company.
Joint Sponsors
China International Capital Corporation Hong Kong Securities Limited (“ CICC ”), one of
the Joint Sponsors, does not consider itself to be independent from the Company according to
Rule 3A.07(3) of the Listing Rules, since CICC Capital Operation Co., Ltd. (༟͉༶ᐄϞ
ʮ̡)( “ CICC Capital ”), a subsidiary of the holding company of CICC, thus being the
member of the sponsor group, is the general partner of CICC Qizhao Ruihong (Xiamen) Equity
Investment Fund Partnership (Limited Partnership) (ح(ژ)ΥྫΆ
ุ(Υྫ)) (“ CICC Qizhao ”), which has been consolidated into the account of the
Company. In its capacity as the general partner of CICC Qizhao, CICC Capital is responsible
for operation and management of CICC Qizhao, and is able to exert substantially all the voting
power in CICC Qizhao, and thus constitutes a substantial shareholder (as defined under the
Listing Rules) of CICC Qizhao. Therefore, CICC Capital is a core connected person (as defined
under the Listing Rules) of the Company.
Huatai Financial Holdings (Hong Kong) Limited satisfies the independence criteria
applicable to sponsors as set out in Rule 3A.07 of the Listing Rules.
Each of the Joint Sponsors will receive a fee of US$100,000 for acting as the sponsor for
the Listing.
Preliminary Expenses
The Company has not incurred any material preliminary expenses.
Promoters
The promoters of the Company are Mr. Zhu Yiming, Insight Power Investments Limited
(ʮ̡), InfoGrid Limited, Tus Zhonghai V enture Capital Co., Ltd. (ʕऎ௴
ʮ̡), TeraHertz Limited (ʮ̡), Infotech V enture Capital Co.,
Ltd. (ʮ̡), Shenzhen Zhonghe Chunsheng No. 1 Equity Investment
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-32 –


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Fund Partnership (Limited Partnership) (ΥྫΆุ(Υ
ྫ)), Beijing Y ourong Hengtong Investment Management Center (Limited Partnership) ( ̏ԯ
ஷҳ༟၍ଣʕː(Υྫ)), Beijing Tus V enture Incubator Co., Ltd. (௴ุྷ
ʮ̡), IPV Capital II HK Limited (IPVʮ̡), Tianjin Tengxin V enture
Capital Partnership (Limited Partnership) (௴ุҳ༟ΥྫΆุ(Υྫ)), Alpha
Achieve Limited, Beijing Zhonghai V enture Capital Co., Ltd. (ʮ̡),
Shanghai Huaxin V enture Capital Enterprise (௴ุҳ༟Άุ), Beijing Wanshun
Tonghe Investment Management Center (Limited Partnership) ( ̏ԯຬනஷΥҳ༟၍ଣʕː(Ϟ
Υྫ)), Tianjin Xundu V enture Capital Partnership (Limited Partnership) (ᆛನ௴ุҳ༟
ΥྫΆุ(Υྫ)), Tongfang Huaqing Investment Management Co., Ltd. ( Ν˙ശ૶ҳ༟၍
ʮ̡), Shanghai SummitView V enture Capital Partnership (Limited Partnership) ( ɪऎ
௴ุҳ༟ΥྫΆุ(Υྫ)), Changzhou SummitView V enture Capital Partnership
(Limited Partnership) (௴ุҳ༟ΥྫΆุ(Υྫ)) and Beijing Zhonghai Houde
Investment Management Center (Limited Partnership) (ᅃҳ༟၍ଣʕː(Υ
ྫ)).
Within the two years immediately preceding the date of this prospectus, no cash,
securities, or other benefit has been paid, allotted or given, or has been proposed to be paid,
allotted or given, to any of the promoters named above in connection with the Global Offering
or the related transactions described in this prospectus.
Qualifications and Consents of Experts
The qualifications of the experts which have given opinions or advice which are contained
in, or referred to in, this prospectus are as follows:
Name of Expert Qualifications
China International Capital
Corporation Hong Kong
Securities Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A licensed corporation under the SFO for carrying on
type 1 (dealing in securities), type 2 (dealing in
futures contracts), type 4 (advising on securities),
type 5 (advising on futures contracts) and type 6
(advising on corporate finance) of the regulated
activities as defined under the SFO
Huatai Financial Holdings
(Hong Kong) Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118
A licensed corporation under the SFO for carrying on
type 1 (dealing in securities), type 2 (dealing in
futures contracts), type 3 (leveraged foreign
exchange trading), type 4 (advising on securities),
type 6 (advising on corporate finance), type 7
(providing automated trading services) and type 9
(asset management) of the regulated activities as
defined under the SFO
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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Name of Expert Qualifications
KPMG /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Certified Public Accountants and Public Interest
Entity Auditor registered in accordance with the
Accounting and Financial Reporting Council
Ordinance
King & Wood Mallesons /H1118/H1118/H1118/H1118/H1118/H1118PRC legal advisor
Frost & Sullivan (Beijing) Inc.,
Shanghai Branch Co. /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Independent industry consultant
DLA Piper Singapore Pte. Ltd. /H1118Legal advisor as to international export control,
sanctions and tariff laws
Each of the experts listed above has given and has not withdrawn its written consent to
the issue of this prospectus with the inclusion of its report and/or letter and/or opinion and/or
references to its name included herein in the form and context in which they respectively
appear.
Binding Effect
This prospectus shall have the effect, if an application is made in pursuance hereof, of
rendering all persons concerned bound by all of the provisions (other than the penal provisions)
of Sections 44A and 44B of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance so far as applicable.
Bilingual Prospectus
The English language and Chinese language versions of this prospectus are being
published separately, in reliance upon the exemption provided in Section 4 of the Companies
Ordinance (Exemption of Companies and Prospectuses from Compliance with Provisions)
Notice (Chapter 32L of the Laws of Hong Kong).
Miscellaneous
Save as otherwise disclosed in this prospectus,
(a) within the two years preceding the date of this prospectus, no share or loan capital
of the Company or any of its subsidiaries has been issued or has been agreed to be
issued fully or partly paid either for cash or for a consideration other than cash;
(b) no share or loan capital of the Company or any of its subsidiaries is under option or
is agreed conditionally or unconditionally to be put under option;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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(c) no founder, management or deferred shares of the Company or any of its subsidiaries
have been issued or have been agreed to be issued;
(d) none of the equity and debt securities of the Company or its subsidiary is presently
listed or dealt in on any other stock exchange nor is any listing or permission to deal
being or proposed to be sought;
(e) the Company has no outstanding convertible debt securities or debentures;
(f) none of the experts listed under “— Qualifications and Consents of Experts”:
(i) is interested beneficially or non-beneficially in any shares in any member of
the Group; or
(ii) has any right or option (whether legally enforceable or not) to subscribe for or
to nominate persons to subscribe for securities in any member of the Group
save in connection with the Underwriting Agreements; and
(g) there has not been any interruption in the business of the Group which may have or
has had a significant effect on the financial position of the Group in the 12 months
preceding the date of this prospectus.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES
The documents attached to the copy of this prospectus delivered to the Registrar of
Companies in Hong Kong for registration were:
(a) a copy of each of the material contracts referred to in “Appendix IV — Statutory and
General Information — Further Information about the Business — Summary of
Material Contracts”; and
(b) the written consents referred to in “Appendix IV — Statutory and General
Information — Other Information — Qualifications and Consents of Experts.”
DOCUMENTS A V AILABLE ON DISPLAY
Copies of the following documents will be available on display on the website of the
Stock Exchange at www.hkexnews.hk and the Company’s website at www.gigadevice.com
during a period of 14 days from the date of this prospectus:
(a) the Articles of Association;
(b) the Accountants’ Report, the report on review of unaudited interim condensed
consolidated financial information and the report on the unaudited pro forma
financial information of the Group from KPMG, the texts of which are set out in
“Appendix I — Accountants’ Report”, “Appendix IA — Unaudited Interim
Condensed Consolidated Financial Information” and “Appendix II — Unaudited Pro
Forma Financial Information”, respectively;
(c) the audited consolidated financial statements of the Group for the years ended
December 31, 2022, 2023 and 2024 and the six months ended June 30, 2025;
(d) the legal opinion from King & Wood Mallesons, the Company’s PRC Legal Advisor,
in respect of the Group under the PRC laws;
(e) the legal memorandum issued by DLA Piper Singapore Pte. Ltd., the Company’s
legal advisor as to international export control, sanctions and tariff laws;
(f) the industry report prepared by Frost & Sullivan referred to in the section headed
“Industry Overview” in this prospectus;
(g) the PRC Company Law, the PRC Securities Law, the Overseas Listing Trial
Measures and the Guidelines for the Articles of Association of Listed Companies
issued by the CSRC together with their unofficial English translations;
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND A V AILABLE ON DISPLAY
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(h) the service contracts between each of the Directors and the Company referred to in
“Appendix IV — Statutory and General Information — Further Information about
the Directors — Particulars of the Service Contracts”;
(i) the material contracts referred to in “Appendix IV — Statutory and General
Information — Further Information about the Business — Summary of Material
Contracts”;
(j) the written consents referred to in “Appendix IV — Statutory and General
Information — Other Information — Qualifications and Consents of Experts”; and
(k) the terms of the Stock Option Incentive Plans.
DOCUMENTS A V AILABLE FOR INSPECTION
A copy of full lists of all the grantees who have been granted options to subscribe for A
Shares under the Stock Option Incentive Plans will be made available for public inspection at
the office of Freshfields at 55th Floor, One Island East, Taikoo Place, Quarry Bay, Hong Kong
during normal business hours up to and including the date which is 14 days from the date of
this prospectus.
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND A V AILABLE ON DISPLAY
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